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iPhone 11: How has the launch affected Apple share prices?

By Connor Freitas

Every year, September is a crucial month for Apple. This is when their latest range of iPhones – and occasionally some other products – are showcased to the world at a glitzy event in California.

All eyes are on a few key indicators: the new features on offer, how much the devices cost, and whether the initial reviews are positive. The answers to these questions have an impact on Apple stock analysis. A lack of innovation means current iPhone owners have little incentive to upgrade, pricey phones prevent high sales, and negative murmurings from critics affect consumer confidence.

How has the iPhone 11 affected Apple stock predictions?

There has been a substantial amount of nervousness surrounding the iPhone 11. In the first quarter of 2019, smartphone sales at Apple fell by a stomach-turning 17 percent compared with the same period in 2018. Not only does this suggest that the tech giant has reached a saturation point, but it also illustrates how Apple loyalists are holding on to their devices for longer – and some are being wooed by offerings from rivals such as Samsung and Huawei.

Some analysts warned that the iPhone 11 needed to offer upgraded features that current users wouldn’t be able to live without. Others insisted that prices needed to be slashed to make the range more competitive compared to the rest of the market.

To an extent, Apple managed to deliver on both fronts here. Newly unveiled Pro models boast a triple-lens camera on the back, which Apple says quadruples the amount of scenery that can be captured in a photograph. Visibility is better in low light, and video quality has also been given a boost.

One particularly compelling feature for the image-conscious is the ability to film slow-motion videos from the front camera – paving the way for so-called “slofies”. Elsewhere, the display has been redesigned so it is easier to view in sunlight, the iPhone’s Face ID recognition feature is reportedly 30 percent faster, and its graphics processing unit is both faster and consumes less energy. Battery life – a long-running bugbear for users and critics alike – has also been addressed, with Apple claiming its new models offer up to five hours of extra battery life.

This, when coupled with enhanced water resistance and tougher glass on the front and back, is likely to entice a fair few users to stump up for an upgrade. The fact that prices have also been dropped for the entry-level model by about $50 is also a positive sign, and could help Apple arrest some of the declines they’ve seen in recent months. Early sales are said to be stronger than expected – buoyed by the availability of trade-in programmes and interest-free repayment plans.

Apple shares normally rise in the run-up to a launch event. Indeed, in the period from August 12 to September 10, when the new iPhone models were unveiled, prices leapt from $200.48 to $216.70. Further increases were realised on the day after the launch, when highs of $223.59 were reached. Apple stock price expectations were raised further when the company asked suppliers to increase production of iPhone 11 models by 10 percent. The Apple share forecast was certainly positive immediately after the reports emerged on October 4, with shares rising 1.8 percent early in the trading session.

What’s going to happen next?

Despite the initial warm reception for the new iPhones, there are some threats looming on the horizon. One of them is the fact that Jony Ive, Apple’s head of product design for more than 20 years, announced that he was leaving the company earlier in 2019. When the news became public, Apple’s valuation plunged by $8 billion. Although Ive’s influence on products such as the iPhone are likely to be visible for now – given that new features are plotted well in advance – some analysts are concerned about the future due to the fact that he was such an instrumental figure in Apple’s explosive growth. That said, there were similar fears when Steve Jobs died back in 2011.

Some also believe that Apple has missed a trick by failing to add 5G connectivity to the 2019 range of iPhones. However, experts point out that the tech giant has rarely been the first to introduce such technology, letting competitors fall over themselves to get a head start and only joining the fray when the kinks have been worked out.

Looking ahead, it’s likely that Apple’s strategy will be centred on continuing to build revenue streams in other parts of the business that make it less dependent on the iPhone’s success. There have been some achievements through the likes of Apple Pay and Apple Music, and the introduction of Apple TV+ – billed as a bargain rival to video-streaming behemoth Netflix – is another promising sign. But with other, more established competitors in all of these spaces, success is by no means guaranteed.

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