Apple Unveiled New iPhone, On Track for 2024 AR Headset Delivery

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"Wonderlust" Event

Apple hosted its highly anticipated event on Tuesday, dabbed Wonderlust, with the star of the show being the new iPhone 15 lineup [1]. The company also introduced the latest iterations of its smart watches, with the Series 9 and the Ultra. On the services front, two new iCloud packages were announced. Furthermore, its CEO talked about the recently unveiled augmented reality goggles and reaffirmed the 2024 shipping timeline.

New iPhones

The main event was the latest version of Apple's phones, with the iPhone 15, 15 Plus, 15 Pro and 15 Pro Max. All variants will now feature the controversial dynamic island, which "punches" the top of the screen. Apple also ditched its proprietary Lighting charging cable, for the Type-C standard, used by other smartphone makers. Pre-orders for all four models begin on Friday, September 15 and availability starts on September 22.

The two higher-end models (Pro & Pro Max) are now powered by the A17 Pro, the industry's first 3-nanometer chip. They Pro Max camera sports longer optical zoom, for improved telephoto capabilities. The Pro starts at $999 in the US, same as its predecessor, but the Pro Max starting price is bumped to $1,199. [2]

Tough Smartphone Market

Overall, the new iPhones offer only incremental improvements compared to last year's line-up, which is typical for the firm. The new models come at a tough period for the global smartphone industry, which has been contracting over recent quarters, weighed by chip shortages, saturation, high inflation and other factors.

According to research from Canalys, global shipments dropped 10% y/y in the second quarter. Apple stayed in the second place behind Samsung with 43 million devices, down 13% y/y, but its market share eroded to 17%, (from 21% in Q1). [3]

Apple has shown resilience to those headwinds and its CEO had touted "robust" iPhone sales in emerging markets for the three months ended July 1 (Q3 FY2023). However, it could not avoid an around 2.5% y/y decline in iPhone sales in that period. [4]

The launch of the updated devices came just days after the Wall Street Journal reported that Beijing has banned the use of iPhones for government officials[5]. If true, this could create problems for the tech giant, at a period of heightened Sino-US relation and trade restrictions. China is an important market for the firm, which accounted for nearly 20% of its revenues in the last quarter (Q3 FY2023).

New Smart Watches

The iPhones were not the only hardware announced on Tuesday, as the tech behemoth introduced the updated Apple Watch 9 and the higher end Ultra, with the latter bearing a hefty $799 price tag in the US. All models will hit the stores on September 22, but are already available for order is select courtiers.

One of the highlights is the on-device Siri requests, without the need for internet access. Another key new feature is the double tap gesture, which allows users to perform certain functions, like answering calls, using just one hand and without having to actually touch the screen. These functions are made possible by the new S9 Sip chip, which is Apple's most powerful watch chip yet. [6]

The Wearables, Home and Accessories business is bigger than the Macs and iPads, coming third behind the core iPhone segment and the increasingly important Services. Sales reached $8.284 billion in the last quarter (Q3 FY2023) marking a 2.5% y/y increase.

New iCloud+ Tiers

Apple users get 5 gigabytes of free cloud storage, that allow them to not only store but also access across their devices files, photos and videos. The tech giant offers higher capacity paid services, with the iCloud+. These options start at $0.99/month in the US for 50GB and also provide features like Hide My Email and Custom Email Domains.

During yesterday's event, Apple announced two new pricier iCloud tiers, available for September 18: 6TB for $29.99/month and 12TB for $59.99/month. The new cloud storage plans did not draw much attention, but they may be important down the road and are indicative of Apple's intention.

As people consume increasingly more media, there is greater need for storage and doing that on the cloud, makes accessing that content across devices an easy process. Apple has a strong ecosystem, that competitors have a hard time matching. Turning customers towards cloud storage options could not only provide additional revenue, but more importantly further enhance and safeguard its ecosystem, making switching much harder.

Augmented Reality Goggles

Back in June, Apple unveiled an Augmented Reality (AR) headset, its first major product announcement since 2014 and its smart watch. With the Vision Pro, it enters a niche market, dominated mostly by Meta Platforms.

Apple however seems to have a different vision for its "spatial computing device" and with its massive $3,499 its unlikely to be a direct competitor to Meta's $499.99 Quest 3. During Tuesday's event, CEO Tim Cook said that the firm is "making great progress" with the Vision Pro and is "on track" to begin shipping in early-2024". [1]

He also talked about the progress developers are making, while the new iPhone 15 Pro cameras will have the ability to record three-dimension spatial video for the Vision Pro. Creating a compelling use case for the so far obscure AR device, will be crucial for the success of Apple's big bet, but if someone can establish a market it's the Cupertino firm. Small features like the spatial video, are indicative the firms effort to integrate the new device into its ecosystem.

Lack of Excitement

Overall, the new iPhones and Watches represent marginal upgrades that did not excite investors, although its loyal customers will appreciate the improvements. Apple did not provide any radical new product or feature, at a time when its competitors push forward with foldables and other innovations.

However, the Cupertino tech giant played on its strengths, trying to enhance its services and make leaving its ecosystem harder. Furthermore, the new chips can help with handling more complex processes in the age of AI, but there is some concern that Apple may be taking back seat in this revolution. Its big bet is the Vision Pro, which is months away and we did not get any concrete news around that.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 13 Sep 2023 https://www.youtube.com/watch

2

Retrieved 13 Sep 2023 https://www.apple.com/newsroom/2023/09/apple-unveils-iphone-15-pro-and-iphone-15-pro-max/

3

Retrieved 13 Sep 2023 https://canalys.com/newsroom/worldwide-smartphone-market-Q2-2023

4

Retrieved 13 Sep 2023 https://www.apple.com/newsroom/2023/08/apple-reports-third-quarter-results/

5

Retrieved 13 Sep 2023 https://www.wsj.com/world/china/china-bans-iphone-use-for-government-officials-at-work-635fe2f8

6

Retrieved 18 May 2024 https://www.apple.com/newsroom/2023/09/apple-introduces-the-advanced-new-apple-watch-series-9/

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