Apple's Stock Depends on iPhone That Wasn't There -- Heard on the Street
September 15 2020 - 5:29PM
Dow Jones News
By Dan Gallagher
Such is Apple Inc.'s fate that even solid updates to businesses
worth nearly $107 billion a year in sales aren't quite enough.
Apple announced new iPads, Watch models and a bundled
subscription service on Tuesday. The new iPad Air gets the
company's most advanced processor and starts $100 higher than its
predecessor, while two new Apple Watch models beef up both the
top-end and midrange options for that product family. The new
services offering called Apple One bundles several of the company's
growing range of services under single price points. Combined
revenue for iPad, wearable devices and services is expected to
total $106.5 billion for Apple's current fiscal year that ends
later this month.
That's still only around three-quarters of the revenue generated
by a single product -- the iPhone. As expected, Tuesday's event
broke with Apple's past product cadence by not including an update
to the iconic smartphone. That's presumably because Apple likes
keeping its product announcements close to shipping dates, and
production on this year's flagship iPhone designs was delayed by
the pandemic. The new lineup is widely expected to be ready around
late October -- about a month later than normal -- which means
Apple is likely to hold another event soon to tout it.
That unveiling can't come a moment too soon for investors who've
bid up Apple's market value to a record-busting $2 trillion,
largely on hype for a 5G model that some expect to spark a new
"supercycle" in sales. The stock has cooled 14% from its Sept. 1
peak, including some weakness Tuesday immediately after the event.
But Apple's shares still trade at nearly 32 times forward earnings
-- nearly double their multiple before last year's iPhone launch
event.
That keeps the bar high for Apple. New iPads and Watches will
likely sell well in a more health-conscious world still stuck
working at home. But investors have dialed up big hopes for the
next iPhone, and may have a tough call to make once the mystery is
out.
Write to Dan Gallagher at dan.gallagher@wsj.com
(END) Dow Jones Newswires
September 15, 2020 17:14 ET (21:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2023 to Sep 2024