What the analysts are saying about Apple’s iPhone launch

Here's what the analysts are saying about Apple's iPhone launch. Seen any other comments? Send it in to see them added here. To be updated after the keynote.

Apple, iPhone, iPhone X, iOS, iOS 11, iPhone 8, Apple TV, HomePod, Apple Watch
Adam Patrick Murray/IDG

Apple's big reveal will happen on this day at 10 a.m. PDT, and we’ll be live blogging events as they happen right here. While you wait, here’s a rolling selection of commentary from across the analyst community. Seen anything else? Send it in to see it added here. Will update again after the show.

On the $1,000 iPhone

“We’ve never had any phone that cost this much,” Creative Strategies analyst Ben Bajarin told the FT. He observes that Apple recognizes the strength of its customer loyalty and is simply “giving them more options.”

Apple already has the highest margins in the industry, but the high-end device will “test the price elasticity of regular consumers,” IHS analyst Wayne Lam said.

On iPhone sales expectations

Longbow Research analysis across 35 firms thought to supply components for Apple’s new devices suggests Apple is targeting higher sales than it achieved with either iPhone 6S or iPhone 7, but not quite as high as the "super upgrade cycle" that met 2014’s iPhone 6.

Those claims aren’t quite as optimistic as those from Cannacord Genuity, which last week wrote:

“We believe there is a large group of iPhone 6 consumers positioned to upgrade to the new iPhone products, and therefore we are modelling the percent of iPhone users to upgrade to a new iPhone to increase to 32.4% in C2018 from roughly 28.0% in C2016 and C2017.”

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TrendForce predicts Apple will sell around 227.5 million iPhones, up 5.6% and higher than the smartphone industry growth forecast.

"We think that with expected innovations around AR [augmented reality], wireless charging, viewable screen size, OLED [display], and more, the next iPhone is clearly poised for its largest upgrade cycle yet," said Macquarie Research's Benjamin Schachter.

On Apple’s Chinese puzzle

Prevailing wisdom claims Apple is sinking in China as local vendors pick up the market at the iPhone’s expense. Not so, argues Morgan Stanley analyst Katy Huberty.

“You’ve seen weakness at a number of semiconductor companies that sell into those cheaper brands,” she said. “Their business has been very weak because there’s inventory in the system. That means the shipment data is overstated.”

On iPhone supply

“Due to component supply constraints, we estimate current production of the OLED iPhone at less than 10,000 units per day, which means the model will remain in severe short supply for a while,” wrote KGI Securities Analyst Ming-Chi Ku.

On Augmented Reality and ARKit

Morgan Stanley analyst Katy Huberty raised her Apple target stock price from $203 to $253 overnight on strength of ARKit. She believes the tech will generate new profit boosts for a wide tranche of firms, but she warns that while Apple has first mover advantage, it can’t rest on its laurels.

“Apple is clearly in the lead but the Android ecosystem isn't far behind — Apple's ARKit for developers launched in June 2017, and Google's ARCore Launched in late August 2017,” she says.

On wireless charging

Apple won’t have its own wireless charging solution to share this time round, instead it will support third-party Qi inductive charging solutions, which even Ikea sells. KGI Securities Analyst Ming-Chi Ku says Apple is waiting on “technological breakthroughs” before it introduces its own take on wireless charging. I wonder what such a breakthrough might involve?

On the OLED display

There are some benefits to the deployment of OLED displays, though there may also be some dangers, said Russ Ernst of the Blancco Technology Group.

He thinks Apple will try to introduce a range of protective cases:

“As smartphones become more thin and curved, it’s easier for manufacturers to work with glass than metal. On the down side, it makes these smartphones extremely fragile and fingerprint attractive.

"Apple will try to introduce and upsell protective cases to overcome this problem. With drastic design changes, though there are always surprises, as in the case of the 'death grip' issue during the iPhone 4’s release,” he said in a note provided to me.

On Apple Watch

The jury is split when it comes to making Apple Watch more like a phone with its own LTE connection. Some expect sales to spike, but Loup Ventures analyst Gene Munster warns: "It's a really big deal for the wearables category for Apple, but it's not a big deal for the company," as it will remain hooked on iPhone sales.

On Apple TV

As competitors develop better user interfaces, one of the key reasons to own an Apple TV is being eroded. Apple’s focus on original content is mandatory, said Creative Strategies analysts Carolina Milanesi. “If Apple wants to be competitive they have to go all in.”

On HomePod

“Apple deliberately kept the feature sets for HomePod quiet at WWDC,” said CCS Insights analyst Geoff Blaber. He predicts the company will reveal more about the product’s compatibility with other Apple products and services.

On Apple’s future

“Call it the subscription economy: Not yet, but someday Apple will likely offer bundles of services and products as a simple monthly fee, like the iPhone Upgrade Program but with everything included,” said Forrester VP, Principal Analyst Frank Gillet, echoing previous predictions from CCS Insights.

Where we are now

Apple is coming from a pretty strong position as it upgrades its devices on the tenth anniversary of its smartphone. The world’s number two smartphone vendor by sales, the iPhone 7 was the single best-selling model in Q2 2017, and it has shipped 1.2 billion iPhones since 2007.

A recent 451 Research survey suggests 95% satisfaction among U.S. iPhone customers, and some analysts claim that around a third of existing users will upgrade this year. The global active iPhone user base is thought to be around 600 million. (More stats here).

Check back with us at 10 a.m. PDT to find out more.


Updated 9/12/17 7am PDT with comment from Macquarie Research.

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