The September event from Apple Inc AAPL revealed details of the new iPhone 14, Apple Watch and Airpods. Here’s what analysts think of the updates and what it could mean for the future of the technology giant.
The Apple Analysts: Morgan Stanley analyst Erik Woodring had an Overweight rating and a price target of $180.
Needham analyst Laura Martin had a Buy rating and a price target of $170.
KeyBanc Capital Markets analyst John Vinh had an Overweight rating and a price target of $185.
The Analyst Takeaways: Morgan Stanley's Woodring said the event met expectations and the big focus will now be on what demand there is for the iPhone 14.
“The later launch of the iPhone 14 Plus was a small surprise,” Woodring said. “Our focus now turns to early demand data points, including iPhone lead times.”
The analyst noted pricing was in line with estimates and Apple was working on updating items such as battery, display and camera, above others, as they were what consumers cared the most about.
Woodring believed that Apple will ship 51 million iPhones in the September quarter, with the delay of the iPhone Plus not having a large impact.
“We believe Apple remains best positioned to weather the storm,” Woodring said.
In addition to the new iPhone, Apple showed off the Apple Watch, with both coming with an increased focus on safety features. Needham's Martin mentioned Apple could be “selling fear” with items such as crash detection, fall detection, emergency services notifications and other alerts.
“In fact, the first video focused on a handful of individuals where their Apple Watch had saved their lives,” Martin said. “This repositions the Watch and iPhone as ‘insurance’ in case of catastrophe which, even though rare, should motivate a new segment of Watch and iPhone buyers to purchase Apple products.”
Martin noted the new features could also help with regulators and served as a good marketing strategy for the company.
The analyst also highlighted a strong focus on products aimed at women, which were shown off during the Apple event.
Apple now has three versions of the Apple Watch, which Martin said could be a catalyst.
“With the introduction of its Watch Ultra, Apple will now have 3 Watch price points (SE, Normal, Ultra), which should maximize revenues from Watches.”
The analyst said there were “compelling reasons” for users to upgrade from iPhone 13 to iPhone 14.
KeyBanc's Vinh found less compelling new items presented by Apple at its event.
“We view Apple’s September event, which held interesting tidbits, as uneventful for Apple, which could be a modest negative (sell the news),” Vinh said.
The analyst noted Apple not raising the price of the iPhone 14 could show it doesn’t have as strong of pricing power as expected.
Vinh still saw reasons to upgrade to the new iPhone or for non-Apple users to make the switch. The analyst also came away impressed with the Apple Watch lineup that could strengthen market share in wearables.
Other Stocks to Watch: Vinh highlighted several Apple suppliers in the reaction piece to the Apple event that could see strength from the new products.
This includes Cirrus Logic, Inc. CRUS.
“We view the iPhone 14 launch as positive for CRUS as we expect CRUS to increase content as all front-facing cameras now support auto-focus, which should drive higher adoption of its CLC,” Vinh said.
Radio frequency (RF) stocks such as Broadcom Inc AVGO, Qorvo Inc QRVO and Skyworks Solutions Inc SWKS get “moderately positive” news of incremental 4G and 5G bands, but miss out on the omission of WiFi 6E.
AAPL Price Action: Apple shares are up 1.88% to $157.37 on Friday afternoon.
Photo: iPhone 14 courtesy Apple
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