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Apple (AAPL) iPhone 14 will arrive in three weeks. But are consumers ready?

15:20, 18 August 2022

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Apple iPhone smartphone boxes
Top tech analysts are maintaining positive views ahead of the Apple (AAPL) iPhone 14 launch. – Photo: Shutterstock

A tech giant has set the date for its newest smartphone as one analyst sees strong pent-up demand from consumers ready to upgrade. But amid hot inflation amongst developed markets, are consumers ready?

Apple (AAPL) will sell its new iPhone 14 on 7 September, according to Bloomberg News. Over the past month, Apple stock has risen 19%.

Apple (AAPL) stock price

“In a nutshell, we believe Apple’s growth story remains well intact with clear momentum around iPhone 14 around the corner despite the shaky macr0,” Wedbush Securities analyst Daniel Ives wrote in a note obtained by Capital.com.

Apple remains our favourite tech name as we reiterate our Outperform rating.

Credit Suisse analyst Shannon Cross told MarketWatch that Apple was amongst her “top picks" as the analyst upped the rating on the stock to Outperform.

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New devices

Apple has not officially announced the launch date for the next model in its iPhone range. The company has launched prior smartphone models around the months of September or October.

Smartphone industry website GSM Arena is reporting that four new iPhone 14 models - two models with a 6.1-inch display and two models with 6.7-inch displays - will be unveiled alongside new Mac computers, iPads and a new Apple Watch model.

Mock-up of the new Apple iPhone 14GSM Arena

The industry website added that the new iPhone 14 will have an upgraded notch design, an improved selfie camera and the Pro models will contain Apple’s latest A16 smartphone chip.

Channel check

Wedbush’s Ives had a preliminary channel check on handset numbers. Analysts often carry out channel checks on a company’s suppliers or clients to get a better idea of the business environment.

“We believe the initial order for 90 million iPhone 14 units out of the gates has stayed firm and will be roughly flat with iPhone 13 despite the macro storm clouds,” the analyst wrote.

“This speaks to the underlying demand story that Apple anticipates for this next iPhone release with our estimates that 240 million of 1 billion iPhone users worldwide have not upgraded their phones in over 3.5 years.”

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Consumer demand

Apple will be launching new products amid the backdrop of decades-high inflation. But will consumers snap up the new handset?

 

Consumer prices in the US rose 8.5% in July from a year ago after hitting a more than 40-year high of 9.1% in June while in the UK, the inflation rate has hit 10.1%.

“While the softer macro will clearly play a role in the demand story, we believe the baseline for 220 million iPhone units in [fiscal year 2023] is likely a low bar given the pent up demand story that we are seeing globally for Apple,” Wedbush’s Ives wrote.

Potential Apple phone shoppers can spread online payments with Affirm (AFRM) and Apple also offers trade-in options for certain used phones.

Affirm (AFRM) stock price

Wedbush’s Ives reckons that the base iPhone 14 “will stay at the same price” but the higher-end Pro and Pro Max models may cost $100 more “given component price increases as well as added functionality”.

Investors will get an updated look at how the company is faring when it reports fiscal fourth-quarter earnings in October.

Founded in 1976, Apple is a California-headquartered technology company that designs, develops and sells consumer electronics, software and online services.

Apple's flagship campus in Cupertino, CaliforniaShutterstock

Apple’s product portfolio includes the smartphones, tablets, personal computers, smart watches and wireless earbuds.

Further reading...

What You Need to Know

The week ahead update on major market events in your inbox every week. Subscribe
The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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