Image Source: Apple
By Brian Nelson, CFA
On September 12, Apple Inc. (AAPL) hosted its widely-anticipated “Wonderlust” event. The market was anticipating several new products, and Apple delivered. The firm’s iPhone 15 Pro, iPhone 15, Apple Watch Series 9, and Apple Watch Ultra 2 will go a long way to retaining share in smartphones and wearable devices, but the company opted to leave prices unchanged. Many had been expecting a price increase, but we’re not reading too much into Apple’s decision to leave them unchanged, given economic uncertainty in the U.S., Huawei’s release of its latest phone (the Mate 60 Pro) and rising geopolitical tensions between the U.S. and China.
The iPhone 15 Pro frankly looks awesome, and it is “the first iPhone to feature an aerospace-grade titanium design, using the same alloy that spacecraft use for missions to Mars.” That’s literally out of this world, and we like the buzz it may create, not only for loyal Apple fans but also for those looking to upgrade. Gamers have a lot to like, too. The iPhone 15 Pro will include one of the most advanced graphic processing units (GPUs). The A17 Pro chip “is an entirely new class of iPhone chip that delivers (its) best graphics performance by far.” The iPhone 15’s 48MP Main camera will also be Apple’s latest and greatest, “capturing super-high-resolution photos with a new level of detail and color.” Apple has hit a homerun with its iPhone 15 Pro, starting at $999. The base version of the iPhone 15 will be priced at $799.
Apple released the next iterations of the Apple Watch, the Series 9 and Ultra 2. The Apple Watch Series 9 will have a new powerful chip that will make it 60% faster than the prior model, and it will also come with a new cool feature. With the new Apple Watch, when one’s hands are full, all one has to do to answer a call, play or pause music, or open a notification is to double tap one’s index finger and thumb together. We love this idea, but we’re most excited about the next iteration of the Apple Watch likely to be released in fiscal 2024 or fiscal 2025, the ‘Watch X,’ which we think is a big gamechanger, as it will likely include a blood-pressure monitoring tool, among other upgrades. That said, the Apple Watch Series 9 and Apple Watch Ultra 2 are cooler than we expected, particularly the double tap feature.
All things considered, many viewed Apple’s “Wonderlust” event as mixed, given the lack of a price increase, but we liked both the new iPhone and Apple Watch, even if they are more incremental iterations than revolutionary ones. Our views on Apple’s financials remain unchanged: The company is a net-cash-rich, free-cash-flow generating powerhouse, and while the pace of Apple’s top-line growth may slow in coming years, we think there is upside to numbers come fiscal 2024 and fiscal 2025 given the ‘Vision Pro’ and ‘Watch X.’ As it relates to artificial intelligence, we’ve yet to see the “big reveal” at Apple, but any announcement on this front could send shares surging, in our view. We still like the company as an idea in the newsletter portfolios.
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Tickerized for AAPL, XLK, SCHG, FXI, MCHI, KWEB, SWKS, TSM, AMAT, KLAC, LRCX, QCOM, AVGO, GFS, QRVO, INTC, AMD
Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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