Apple Stock News: iPhone X: Short Supply for High Demand

Apple Stock News

The pre-order for the iPhone X started this weekend on a high note, with the new device selling out minutes after being put on sale. The demand for the new phone was very high (as I Know First had previously predicted), and the limited quantities available, are the main reasons specialists are pointing out as explanations as to how the new device sold out so quickly. 

Shortly after the pre-order sold out, resellers began appearing on Ebay, charging anywhere from $1500 to $60,000 for the simpler version of the iPhone, with a markup from the official price practiced by apple that is $999. Resellers are hoping to receive money for the phones by guaranteeing the delivery will be made by the official launch date.

Meanwhile, Apple continues to struggle to produce the quantity needed to meet the demand.Pre-order sales made by October 28th should be delivered to customers only in December (well after the launch date on November 3). With some experts predicting that before the end of the pre-order period, Apple will sell about 40 million units of the new iPhone, a quantity that the company will only be able to deliver in April or May of the next year.

For the latest Apple Stock News, AAPL closed at $163.05 per share on October 27th, 2017. It generated a profit of 3.58% from its previous close on October 26th, 2017, when it closed at $157.41 per share.

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Apple Stock News: Production Woes

Apple Stock News

For the latest Apple Stock News, AAPL closed at $157.10 per share on October 24th, 2017. It generated a gain of 0.60% from its previous close on October 23rd, 2017, when it closed at $156.17 per share.

The iPhone X will not be able to meet demand this holiday season.  Production has been “severely delayed” because of several components that manufacturers were having trouble producing.  These components mainly dealt with the facial recognition system known as FaceID which uses advanced algorithms based on artificial intelligence.  The difference between this use of AI and previous uses is that they are powered by the phone’s A11 Bionic chip and not powered by the cloud, a very complex task.

According to expert analyst Ming-Chi Kuo of KGI Securities, “the worst is behind us” in terms of production problems.  Despite this, Apple will still only be able to manufacture 20 million iPhone X units by the end of 2017.  Its previously stated goal was 40 million units.  This is a humongous miss.

To add to Apple’s recent woes, due to super low interest in the iPhone 8 and 8 Plus, production is being halved.  This is after less than one month in the market.

Other News

On the positive side, Apple Pay, where an iPhone is used as a proxy for a card or cash, has just finished entering its 20th market.  These markets encompass 70% of the world’s card transaction volume.  Apple Pay is also used for 90% of all mobile contactless transactions where active, a category that is increasingly growing.  The wallet can now also work with 4,000 card issuers.

Apple COO Jeff Williams recently spoke about the future opportunity in healthcare.  This opportunity will mainly be brought about through advances in hardware and AI.  It is known that Apple has long been eyeing the healthcare space as one ripe for disruption.  They are currently working on several R&D initiatives in the area and are examining a push into primary care to improve the process of care delivery.

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Apple Stock News: Shortage Of IPhone X For Preorder

Apple Stock News

For the latest Apple Stock News, AAPL closed at $156.25 per share on October 20th, 2017. It generated a profit of 0.17% from its previous close on October 19th, 2017, when it closed at $155.98 per share.

Apple’s new iPhone X preorder starts next week on October 27th, 2017. According to KGI Securities analyst Ming-Chi Kuo, Apple will have only 2 to 3 million units available to purchase.

It seems that those numbers are not enough to meet demand. From previous first-weekend sales, Apple sold 9 million iPhone 5s/5c units , 10 million iPhone 6 and 13 million units of iPhone 6s. Moreover, iPhone 6 and 6 Plus gathered over 4 million preorders in its first 24 hours. Consequently, Apple’s iPhone X short supply might disappoint many buyers.

Kuo believes that the new features present in the iPhone X will lead to a supply constraint. According to him, Apple changed its average circuit board to a flexible printed circuit board for the new camera, which resulted in a problem for Apple to find a supplier for it. The radical redesign that Apple planned for its newest product may be triggering its supply crunch.

Nevertheless, KGI analyst expects that production will increase significantly in November.

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Apple Stock News: New Mobile Apps For Industrials

Apple Stock News

For the latest Apple Stock News, AAPL closed at $159.76 per share on October 18th, 2017. It generated a loss of 0.44% from its previous close on October 17th, 2017, when it closed at $160.47 per share.

 

Tech giant Apple and industrial behemoth General Electric are partnering to create mobile apps for the industrial industry.  This could include factories, power plants, and many other segments.

On Wednesday, the duo announced that they are launching a toolkit to allow developers to create apps for the iPhone and iPad that would use GE’s industrial IoT analytics platform, Prefix.  This Prefix platform is now Apple’s preferred tool for connected factories.  It would allow remote workers to connect for inspections and repairs.  It should result in increased cost savings and less unplanned work stoppages.  This partnership will merge Apple’s user experience expertise with GE’s industrial focus.  It also illustrates Apple’s need to keep future sales strong by foraying deeper into the enterprise market. The toolkit will be available to download starting October 26th.

Other Developments

According to KeyBanc analyst John Vinh, the iPhone 7 is outselling the iPhone 8 in the U.S.  This is just more evidence that consumers don’t see the value in the iPhone 8 and that many potential customers are instead waiting for the iPhone X.  One meaningful factor is that the iPhone 8 currently costs $150 more than the iPhone 7.

On a positive note, according to GBH Insights analyst Daniel Ives, 70% of Apple Watch Series 3 buyers (and current iPhone owners) are purchasing their first Apple Watch.  He also learned that 80% of Series 3 buyers are purchasing the cellular version which does not need an iPhone nearby to function.  The cellular version is also $100 more than the basic version, yielding Apple extra profit.  This success in the wearables market bodes well for Apple’s future.

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Apple Stock News: Apple’s Valuation To New Highs With IPhone X

Apple Stock News

For the latest Apple Stock News, AAPL closed at $160.47 per share on October 17th, 2017. It generated a profit of 0.36% from its previous close on October 16th, 2017, when it closed at $159.88 per share.

As we are getting closer to November 3rd, iPhone X’s launching date, Apple’s manufacturing partners released their first shipments of the handsets. Customers seems to be very anxious to purchase the iPhone X and this, consequently, may drive Apple’s valuation to new heights.

Apple’s profits may boost due to the higher prices assigned to this new iPhone generation. Many analysts raised the Company’s ratings. Daniel Ives from GBH Insights expects that there will be sufficient uptake of the iPhone 8, iPhone 8 Plus and iPhone X for the next 12 to 18 months, which may in turn leave the stock price to range between $160 and $175. Ives believes that the iPhone X product cycle can be the strongest iPhone product cycle to date.

KeyBanc Capital Markets also raised its rating for Apple shares. According to Andy Hargreaves, there will be a “strong high-end demand” for the newest iPhone, which will favor investors sentiment over at least the next few quarters. Furthermore, the KeyBanc analyst predicts a gross profit margin of 39.5% and $11.68 of earnings per share for the fiscal 2018.

Hence, as Hargreaves said, Apple is a franchise with subscription-like qualities and not a regular hardware business, which support the Company’s position in a strong range.

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Apple Stock News: Holiday Season Won’t Impress, But Future Still Solid

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

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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Apple Stock News: Unifying User Experience With Face ID Technology

Apple Stock News

For the latest Apple Stock News, AAPL closed at $155.84 per share on October 9th, 2017. It generated a profit of 0.35% from its previous close on October 6th, 2017, when it closed at $155.3 per share.

Rumors are being spread that the next model of the iPad Pro, to be released next year, will include Apple’s Face ID technology. According to historically accurate analyst Ming Chi-Kuo, of KGI Securities, the upcoming generation of iPad Pro will come with depth-sensing cameras, which are already present in iPhone X, allowing this new facial recognition tech to be available.

The expectations are that the TrueDepth camera will only be offered on the iPad Pro models and not in the cheaper ones. This tech hasn’t yet been tested and approved by customers, since the iPhone X will only hit stores on November 3rd, 2017.

Despite this, Ming believes that the 2018 iPhones, non-X models, might also adopt the Face ID technology. Everything depends on the success of the tech after this year’s release.

Implementing Face ID on iPad Pro would unify user experience across Apple’s mobile devices, therefore, boosting Apple’s competitiveness. Once all high-end iOS devices are equipped with the same advanced technology, Apple’s ecosystem development will also benefit.

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Apple Stock News: Which New iPhone Has Higher Margins?

Apple Stock News: Which New iPhone Has Higher Margins?

October 4, 2017

Apple Stock News

For the latest Apple Stock News, AAPL closed at $154.48 per share on October 3rd, 2017. Its share price increased 0.44% from its previous close on October 2nd, 2017, when it closed at $153.81 per share.

Image Source: Apple

An interesting question is starting to be asked.  Which new iPhone is more profitable-the iPhone 8 or the iPhone X?  The iPhone 8 and 8 Plus are similar to the iPhone 7 in terms of manufacturing cost.  Even so, Apple bumped up the price of these phones compared to the iPhone 7 due to the higher storage capacity of 64 GB.  There is also the option to upgrade to 256 GB storage for $150 which applies to all 2017 models.  These facts indicate a healthy margin for the iPhone 8.  But everyone knows the X starts at $1,000 so shouldn’t it have a higher margin?

$$ for Samsung

Maybe or maybe not.  The X model is believed to cost significantly more to manufacture due to the radical redesign.  An example being the new OLED screens supplied by Samsung as well as the more advanced cameras.  Samsung is estimated to earn at least $110 from each iPhone X model sold which could amount to $4B over the first 20 months after the X model ships according to Counterpoint Technology Market Research.  These new screens cost significantly more than the screens in previous models.  The price of $1,000 might not be enough to make up for the additional new costs and could lead to a lower margin compared to the 8 models.

However, this assumption could get muddled because more than half of the iPhone X consumers are gravitating towards the 256 GB model which costs $150 more than the base model.  That would add to its profitability.  For the iPhone 8, less than half of the customers are expected to buy the 256 GB model.

The iPhone 8  demand is seen as being subpar because consumers are waiting for the release of the iPhone X.  Obviously, Apple and its investors would want to sell more of its most profitable model.  Right now, that model is a mystery.  That being said, with higher prices all around, the iPhone average selling price (ASP) should see a noticeable jump.

In Other News

According to a survey reported to the Financial Times, less than 25% of Chinese consumers who plan to buy a new smartphone would buy an iPhone.  More than 30% would rather buy a Huawei smartphone.  The reasoning is that most of the market growth is going to the mid-market space, not the premium space where Apple operates.

The Trump administration’s proposed tax framework could have a significant effect on Apple.  The framework mentions “rules to protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of multinational corporations.”  The rate and formula weren’t listed, but this one sentence can have multi-billion dollar implications for multinationals like Apple.  One positive takeaway from the framework is that it would allow Apple to repatriate many years’ worth of foreign earnings at a reduced tax rate which is expected to be in the 10-15% range.

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Apple Stock News: Apple’s New IPhone 8 and 8 Plus Can Fast-Charge

Apple Stock News

For the latest Apple Stock News, AAPL closed at $154.12 per share on September 29th, 2017. It generated a profit of 0.54% from its previous close on September 28th, 2017, when it closed at $153.28 per share.

The new iPhone 8 and iPhone 8 Plus are coming out with a new feature. Apple launched fast-charging which allows you to quickly recharge your iPhone in a convenient way. Fast-charging enables you to recharge your iPhone battery up to 50% in 30 minutes.

As commonly known for Apple, you will need to buy a few separate accessories to have access to this feature. Apple’s iPhones don’t include any of the required accessories when purchasing the phones themselves. The good news is that fast charging can be done with a third-party USB-C power adapter that supports USB Power Delivery or with Apple’s 29W, 61W or 87W USB-C Power Adapter. Despite this, you still need to buy Apple’s USB-C to Lighting cable. Fast-charging capabilities will cost around $70.

Thus, even though this new feature might be a bit expensive, fast-charging is definitely an investment worth making. Fast-charging can make a huge difference and it is great to see that Apple finally introduced it to the iPhone.

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Apple Stock News: Weak iPhone 8 Demand While iPhone X Steals the Spotlight

Apple Stock News: Weak iPhone 8 Demand While iPhone X Steals the Spotlight

September 26, 2017

Apple Stock News

For the latest Apple Stock News, AAPL closed at $151.89 per share on September 22nd, 2017. Its share price decreased 0.98% from its previous close on September 21, 2017, when it closed at $153.39 per share.

There has been some concern for initial sales of the iPhone 8 and 8 Plus since the release.  Most reports tell of subpar demand due to the lack of new and exciting features.  Customers of the iPhone 8 just seem to be upgrading their devices since their current handset is too far behind technologically.  There is no strong enthusiasm for the product.

However, this enthusiasm might just be reserved for the iPhone X which is the most superior handset that Apple offers.  In contrast to the iPhone 8, it has an OLED screen, facial recognition for secure log-in, and a fresh design.  Many consumers will likely wait to buy the X rather than purchase the iPhone 8 or 8 Plus which is more of the same.  The iPhone X goes on sale November 3rd while the iPhone 8 devices were just released on September 22nd.

The day before the special launch of the iPhone 8 handsets on September 12th, the market value of AAPL was $835B.  By market’s close on September 22nd, the market value was $782B.  A loss of over $50B in market capitalization.  According to many analysts, this pullback could be a smart buying opportunity.  Since it’s likely that consumers are waiting to purchase the iPhone X at the expense of the iPhone 8, it could benefit AAPL in the long run because the iPhone X is more expensive and carries a higher profit margin.  That being said, there are whispers that Apple won’t be able to satisfy demand for the iPhone X until 2018.

In Other News

In other news, the new Apple Watch Series 3, which launched the same day as the iPhone 8 devices, has been a surprise hit.  It differs from previous models in that it comes with cellular connectivity.  It doesn’t need to be near an iPhone to be fully functional.  As opposed to the iPhone 8, many stores actually sold out of their Apple Watch products.  Anecdotal accounts even show that half of consumers in line are waiting for this product.

Additionally, Apple announced that starting September 25th, the default web search in Siri and Spotlight will switch from Bing to Google. It has been estimated that Google will pay Apple approximately $3B to be the default search engine on the iPhones and iPads.

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