Apple Stock News
Holiday Season Won’t Impress, But Future Still Solid
For the latest Apple Stock News, AAPL closed at $156.99 per share on October 13th, 2017. It generated a profit of 0.63% from its previous close on October 12th, 2017, when it closed at $156.00 per share.
Production problems will likely hamper the supply of the iPhone X in the holiday quarter and first quarter of 2018. This can be seen already with the first batch of 46,500 units that Foxconn just started to ship. First batches of previous models were significantly higher than 46,500 units. Apple has reportedly run into major issues mass producing the True Depth camera sensor that is a part of the new Face ID system. This is unfavorable news because the demand is definitely there right now. In a recent survey, over 70% of prospective iPhone X buyers plan to buy the phone very soon or before the end of the year. It remains to be seem just how much of that demand will go unfulfilled in the coming months.
The short term narrative for Apple is not strong. Q4 2017 and Q1 2018 could very easily have falling unit sales YoY. This is also happening in a growing market. Apple will likely lose market share. But what matters is profits. For the iPhone X, there is still some uncertainty on whether it will be a net plus or net minus gross margin-wise compared to the previous generation iPhone. However, most analysts seem to be in the stable or net plus camp. It is known that the component costs for the X model increased drastically from previous years, but so did the selling price. We also don’t know if Apple negotiated better prices with its suppliers.
Longer term, the Apple story is solid. Many consumers are still going to upgrade their handsets and the iPhone X has truly excited consumers. Assuming the X model won’t hurt the profit margin, it should be a good year for Apple. Not to mention that more than half of consumers plan on buying the $1,149 256GB X model as opposed to the $999 64GB X model. That should give the profit margin a boost.
In other news, Qualcomm Inc has filed lawsuits in China seeking an injunction against the manufacture and sale of the Apple iPhone in the world’s biggest market. The suits were filed in a Beijing intellectual property court where the claim was patent infringement. Apple along with many other major companies are in a global legal battle on the practice of charging a percentage of the total price of products as a licensing fee for using patents, a practice that benefits Qualcomm immensely.
Lastly, a recent survey bodes well for the Apple Watch sales. 15% of iPhone users said they plan to buy the product along with a new iPhone.
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