iPhone XS and iPhone XR are a recipe for success for Apple stock

Posted:
in iPhone edited September 13
The day after Apple unveiled three new, pricey iPhones and a new Apple Watch, the move even further towards the premium segment was a focus of several analyst reports, with them all saying that Apple's earnings will hit new heights both from increased sales volume, and a higher average selling price per device.

iPhone XS


Analysts weighed on late Wednesday and early Thursday on Apple's reveal of three new iPhones, the iPhone XS, XS Max, and XR, with the iPhone XS family positioned in price similarly to the iPhone X from a year ago.

"Once again, Apple has shown their mastery of pricing tiers," Gene Munster of Loup Ventures wrote. "Factoring in nine new phones with price points above the FY18 ASP ($745) makes it highly likely that ASPs will trend up."

Munster also noted that thanks to improving hardware and WatchKit, Apple Watch is "building an insurmountable lead in the wearables space."

Morgan Stanley's Katy L. Huberty announced a $2 price target increase to $247, its second increaes of its Apple price target in two weeks.

"Today's product event largely met our expectations heading into the event," said Huberty. "While this iPhone launch was marketed as an "S" cycle, iPhone ASPs and larger storage SKUs across the portfolio surprised to the upside, as did the inclusion of dual-SIM capabilities."

Other analysts spoke in more detail about the other features of the new iPhone lineup.

"The company is attempting to create more iPhone options, while moving its whole portfolio further up into the premium segment," wrote Wayne Lam, Jusy Hong, Gerrit Schneemann of IHS Markit. "Apple has completed its hardware design refresh that started with iPhone X, and moves to an all-notch display line-up. Features like high-refresh-rate and high-dynamic-range (HDR) OLED displays, computational photography and enhanced audio recording, and improved performance for artificial reality (AR) games and other offerings, re-enforce Apple's focus on the user experience Apple is now further moving its devices beyond the reach of its competitors, at least in terms of the ability to charge premium prices."

Guggenheim Partners' Robert Cihra wrote that Guggenheim is raising its Apple price target to $245, from $235, following the announcement.

"A is for Apple; A is also for ASP, we think investors have been too focused on flattening iPhone units and not enough on its potential to grow through ASPs (e.g., able to raise prices without losing market share, illustrating the power of its high-end demographic and peel-off-the-top model)," Cihra wrote. "Indeed, we reiterate our math that with Apple's iPhone ASP having increased in 6 of the 10 years since introduction (contrary to typical hardware deflation), those price increases have effectively been a bigger driver of Apple's revenue "upside" than its units over that period."

While noting that most of what Apple announced Wednesday had leaked in advance and was therefore unsurprising, Macquarie Research's Ben Schachter proclaimed Macquarie "incrementally more positive given AAPL's likely ability to raise iPhone ASPs," and therefore raised their price target from $214 to $235. Schachter also noted that the new AppleCare pricing announced Wednesday had a chance to positively impact revenue in Apple's Services sector.

Jun Zhang of Rosenblatt Securities, while surprised at the lack of a new iPad Pro, set a $200 price target. "Overall, we are positive on Apple, as we believe the company will continue to generate strong iPhone shipments, strong service revenues, and increase margins." While stating that the new iPhone XS "may not offer enough of a product upgrade from the iPhone X to drive sales," Rosenblatt predicted that the other two models "will perform well in the market."

On Wednesday in Cupertino, Apple officially announced three new iPhones, the iPhone XS, XS Max, and XR, as well as the redesigned Apple Watch Series 4.
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Comments

  • Reply 1 of 22
    These morons do realize that some of these phones will cost $1500 + with taxes, right?

    A comment I saw on the New York Times describes these phones well- do not call the phone the iPhone X S, call it the iPhone "excess".

    From the Google:
    ex·cess
    ikˈses,ˈekses/
    noun

    1. an amount of something that is more than necessary, permitted, or desirable.
    synonyms: surplus, surfeit, overabundance, superabundance, superfluity, glut 


    2. lack of moderation in an activity, especially eating or drinking. synonyms: overindulgence, intemperance, immoderation, profligacy, lavishness, extravagance, decadence, self-indulgence, overconsumption

    3. exceeding a prescribed or desirable amount."trim any excess fat off the meat"
    synonyms: surplus, superfluous, redundant, unwanted, unneeded, excessive

    It is not so much a phone as it is a portable Playstation combined with a camera with fake Bokeh.
  • Reply 2 of 22
    lkrupplkrupp Posts: 6,295member
    davgreg said:
    These morons do realize that some of these phones will cost $1500 + with taxes, right?

    A comment I saw on the New York Times describes these phones well- do not call the phone the iPhone X S, call it the iPhone "excess".

    From the Google:
    ex·cess
    ikˈses,ˈekses/
    noun

    1. an amount of something that is more than necessary, permitted, or desirable.
    synonyms: surplus, surfeit, overabundance, superabundance, superfluity, glut 


    2. lack of moderation in an activity, especially eating or drinking. synonyms: overindulgence, intemperance, immoderation, profligacy, lavishness, extravagance, decadence, self-indulgence, overconsumption

    3. exceeding a prescribed or desirable amount."trim any excess fat off the meat"
    synonyms: surplus, superfluous, redundant, unwanted, unneeded, excessive

    It is not so much a phone as it is a portable Playstation combined with a camera with fake Bokeh.
    So the same fools who declared no one would buy a $1000 phone are now saying the same thing about a $1500 phone? I personally think it's now a case of the time honored "Champagne taste but Beer pocketbook" syndrome. One might covet a BMW X5 but can only afford a Chevy Traverse. One might desire an iPhone XS Max but can only afford an iPhone 7. As the article points out it's about ASP's and margins, not about making a phone affordable by the masses. The Mac isn't and never was a PC for the masses either. Most of the world runs on Windows and Android. Most of the world drives Kia's and Toyota's. Apple has decided to cater to the premium market. It may leave me behind but I understand the motive. No, I can't afford a tricked out iPhone XS Max but Apple will sell a lot of them to people who can. For those of us who want the Apple karma an iPhone 7 will do. However, I CAN afford an iPhone XR and I think this phone will be the top seller.

    What I don't get is how these same people don't seem to have an issue with other premium market products like automobiles, watches, stereo systems, speakers, headphones. I can't afford a set of speakers that cost $15K each but apparently others can. Nor can I afford a $10K HDTV but hey, whatever.
    edited September 13 WhiskeyAPPLEcidernetmageequality72521RonnnieOclaire1fastasleepjony0
  • Reply 3 of 22
    Apple was able to deliver yet again. They still have that 'magic' that keeps you on the edge of their seat during their announcements. I think it's interesting that Apple once again used their patented method of introducing a controversial feature (removing the home button) in a high end, high priced version, while leaving the legacy method intact in the old, undesirable model. Then, releasing said controversial feature in the lower priced, mass market model, and it's now no longer controversial, instead it's an upgrade. They've done this before, and it's a really smart method. Also, now that Apple is in control of their own chips, they finally are free of the shackles of some other company's time tables not matching up with their announcements. And they don't have to pay high prices for the high-end designed chip, they can just throw every feature they want in. No more paying Intel through the nose to hit print on some new 7nm process they've already developed.
    edited September 13 JWSCfastasleep
  • Reply 4 of 22
    It's the Apple Watch Series 4. I am predicting it will sell like pancakes on the 4th of July.
    netmageequality72521jdgaz
  • Reply 5 of 22
    steven n. said:
    It's the Apple Watch Series 4. I am predicting it will sell like pancakes on the 4th of July.
    “Hotcakes” not pancakes. LOL.
    jdgazfastasleep
  • Reply 6 of 22
    iPhone Xs on a payment plan is $50 a month. AT&T and Comcast each costs over $200 a month for many people. I think people can afford $50 a month.
    lkruppjony0
  • Reply 7 of 22
    lkrupp said:
    davgreg said:
    These morons do realize that some of these phones will cost $1500 + with taxes, right?

    A comment I saw on the New York Times describes these phones well- do not call the phone the iPhone X S, call it the iPhone "excess".

    From the Google:
    ex·cess
    ikˈses,ˈekses/
    noun

    1. an amount of something that is more than necessary, permitted, or desirable.
    synonyms: surplus, surfeit, overabundance, superabundance, superfluity, glut 


    2. lack of moderation in an activity, especially eating or drinking. synonyms: overindulgence, intemperance, immoderation, profligacy, lavishness, extravagance, decadence, self-indulgence, overconsumption

    3. exceeding a prescribed or desirable amount."trim any excess fat off the meat"
    synonyms: surplus, superfluous, redundant, unwanted, unneeded, excessive

    It is not so much a phone as it is a portable Playstation combined with a camera with fake Bokeh.
    So the same fools who declared no one would buy a $1000 phone are now saying the same thing about a $1500 phone? I personally think it's now a case of the time honored "Champagne taste but Beer pocketbook" syndrome. One might covet a BMW X5 but can only afford a Chevy Traverse. One might desire an iPhone XS Max but can only afford an iPhone 7. As the article points out it's about ASP's and margins, not about making a phone affordable by the masses. The Mac isn't and never was a PC for the masses either. Most of the world runs on Windows and Android. Most of the world drives Kia's and Toyota's. Apple has decided to cater to the premium market. It may leave me behind but I understand the motive. No, I can't afford a tricked out iPhone XS Max but Apple will sell a lot of them to people who can. For those of us who want the Apple karma an iPhone 7 will do. However, I CAN afford an iPhone XR and I think this phone will be the top seller.

    What I don't get is how these same people don't seem to have an issue with other premium market products like automobiles, watches, stereo systems, speakers, headphones. I can't afford a set of speakers that cost $15K each but apparently others can. Nor can I afford a $10K HDTV but hey, whatever.
    It all started when Apple went cheapo and allowed its products to be sold at Walmart and other discount places. 

    Sure Apple got more exposure, but IMHO it wasn't worth it because there are a lot of customers who buy Apple products and expect them to last forever BECAUSE of their price. 

    Btw just because some people can only afford an older iPhone, it does not make it the same kind of purchase of an older generation android. 

    The only bad move IMHO was killing the SE.  There is still a market for that phone with customers who like that size of iphone. 

  • Reply 8 of 22
    herbapouherbapou Posts: 2,207member
    Despite its high price tag,  the Xs Plus is still making some ppl dwelling.

    I think some folks will still go to the most expensive one event when there budget tells them to go for the Xr
  • Reply 9 of 22
    herbapouherbapou Posts: 2,207member
    steven n. said:
    It's the Apple Watch Series 4. I am predicting it will sell like pancakes on the 4th of July.
    “Hotcakes” not pancakes. LOL.
    Pancakes should be hot anyway. :smile: 
  • Reply 10 of 22
    herbapouherbapou Posts: 2,207member

    steven n. said:
    It's the Apple Watch Series 4. I am predicting it will sell like pancakes on the 4th of July.
    I am starting to love the watch too.
    still waiting for them to add some blood test metrics then its a go for me.
  • Reply 11 of 22
    JWSCJWSC Posts: 142member
    lkrupp said:
    davgreg said:
    These morons do realize that some of these phones will cost $1500 + with taxes, right?

    A comment I saw on the New York Times describes these phones well- do not call the phone the iPhone X S, call it the iPhone "excess".

    From the Google:
    ex·cess
    ikˈses,ˈekses/
    noun

    1. an amount of something that is more than necessary, permitted, or desirable.
    synonyms: surplus, surfeit, overabundance, superabundance, superfluity, glut 


    2. lack of moderation in an activity, especially eating or drinking. synonyms: overindulgence, intemperance, immoderation, profligacy, lavishness, extravagance, decadence, self-indulgence, overconsumption

    3. exceeding a prescribed or desirable amount."trim any excess fat off the meat"
    synonyms: surplus, superfluous, redundant, unwanted, unneeded, excessive

    It is not so much a phone as it is a portable Playstation combined with a camera with fake Bokeh.
    So the same fools who declared no one would buy a $1000 phone are now saying the same thing about a $1500 phone? I personally think it's now a case of the time honored "Champagne taste but Beer pocketbook" syndrome. One might covet a BMW X5 but can only afford a Chevy Traverse. One might desire an iPhone XS Max but can only afford an iPhone 7. As the article points out it's about ASP's and margins, not about making a phone affordable by the masses. The Mac isn't and never was a PC for the masses either. Most of the world runs on Windows and Android. Most of the world drives Kia's and Toyota's. Apple has decided to cater to the premium market. It may leave me behind but I understand the motive. No, I can't afford a tricked out iPhone XS Max but Apple will sell a lot of them to people who can. For those of us who want the Apple karma an iPhone 7 will do. However, I CAN afford an iPhone XR and I think this phone will be the top seller.

    What I don't get is how these same people don't seem to have an issue with other premium market products like automobiles, watches, stereo systems, speakers, headphones. I can't afford a set of speakers that cost $15K each but apparently others can. Nor can I afford a $10K HDTV but hey, whatever.
    It all started when Apple went cheapo and allowed its products to be sold at Walmart and other discount places. 

    Sure Apple got more exposure, but IMHO it wasn't worth it because there are a lot of customers who buy Apple products and expect them to last forever BECAUSE of their price. 

    Btw just because some people can only afford an older iPhone, it does not make it the same kind of purchase of an older generation android. 

    The only bad move IMHO was killing the SE.  There is still a market for that phone with customers who like that size of iphone. 

    I was quite partial to the classic shape of the SE as well. They may still continue to assemble it in India for the local market.  But given its non-mention at the event it’s done for on the global market.

    Apple has better information than everyone else on the quantities they sell and the margins they make.  As sad as it is to see that form factor sunset, Apple surely is making a rational decision.
  • Reply 12 of 22
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 133unconfirmed, member
    The Xr is going to be a hit!

    I'm finally updating my 6.

    It's going to be a huge jump hahahahahahah
  • Reply 13 of 22
    FolioFolio Posts: 371member

    Apple satisfied its expanding (and increasingly captive) base yesterday. It also flashed many attractions to gain Android users of various ages. 

    1. The Watch—with its ECG, Afib, and Fall Detection—suddenly becomes a gateway product, a near necessity for many elderly, and tempting to non-geek guys older than 45. The new design may still say “strapped computer,” but certain combos starting to look more chic than geek. 

    2. The Apps. Can Samsung or Huawei or any other phones run the HomeCourt app, demoed by NBA Hall of Famer Steve Nash? Or that crazy multiplayer AR, or other games, and shopping AR apps alluded to? Not for awhile. In this Apple has unique, maybe more "must-have," attractions for teens and twenties. 

    3. The iPhones. The increase in screen sizes great for services, not to mention China market. The camera boost and post-processing looks significant. The introduction of Xr will immensely enlarge the AR users, and Pay users, etc. All this and more foretells a swelling ecosystem.

    claire1
  • Reply 14 of 22
    FolioFolio Posts: 371member
    One side note, for X owners like myself. Killing the line, and making more capable Xr available at a relative pittance means the resale value of X drops off a cliff to $500 and change-- nearly 50% from initial retail. For that reason, I'll probably hold onto mine, but will likely upgrade my Series 3 cellular watch.
  • Reply 15 of 22
    dewmedewme Posts: 1,615member
    Few people understand or appreciate the massive development costs associated with a product as sophisticated as the iPhone. Even people who understand said that 7nm technology was still too difficult and expensive to undertake in 2018. But Apple showed that is not the case. I can’t even guess, but I can easily imagine the total non recurring engineering (NRE) expenses for the XS, XS Max, and XR were in the several tens of billions of dollars range. Taking on costs of this magnitude on a yearly recurring basis just for one product line needs to be resolved by amortizing expenses far beyond the bill of materials costs associated with per unit production costs. All these morons who claim that Apple has 60-70% profit margins on iPhone sales without any consideration for NRE expenses don’t know what they are talking about. 

    Is $1500 too much to pay for a personal supercomputer that fits in your pocket? Let’s see anyone out there best Apple at 2X that price while making enough money to keep their company afloat and pay their staff decent salaries. 
    claire1
  • Reply 16 of 22
    Meh the stock was down yesterday.
  • Reply 17 of 22
    herbapou said:
    steven n. said:
    It's the Apple Watch Series 4. I am predicting it will sell like pancakes on the 4th of July.
    “Hotcakes” not pancakes. LOL.
    Pancakes should be hot anyway. :smile: 
    They’re not bad cold when you use them like a tortilla for a breakfast burrito. ;)
  • Reply 18 of 22
    Meh the stock was down yesterday.
    And up today.
    SpamSandwichfastasleepjony0
  • Reply 19 of 22
    jdgazjdgaz Posts: 293member
    I sure hope my wife decides that she would like to upgrade her phone. She can have my X and and I would gladly take the Xs. And while I am at it my series 0 watch is finally going to permanent retirement. 
    claire1
  • Reply 20 of 22
    claire1claire1 Posts: 353unconfirmed, member
    lkrupp said:
    davgreg said:
    These morons do realize that some of these phones will cost $1500 + with taxes, right?

    A comment I saw on the New York Times describes these phones well- do not call the phone the iPhone X S, call it the iPhone "excess".

    From the Google:
    ex·cess
    ikˈses,ˈekses/
    noun

    1. an amount of something that is more than necessary, permitted, or desirable.
    synonyms: surplus, surfeit, overabundance, superabundance, superfluity, glut 


    2. lack of moderation in an activity, especially eating or drinking. synonyms: overindulgence, intemperance, immoderation, profligacy, lavishness, extravagance, decadence, self-indulgence, overconsumption

    3. exceeding a prescribed or desirable amount."trim any excess fat off the meat"
    synonyms: surplus, superfluous, redundant, unwanted, unneeded, excessive

    It is not so much a phone as it is a portable Playstation combined with a camera with fake Bokeh.
    So the same fools who declared no one would buy a $1000 phone are now saying the same thing about a $1500 phone? I personally think it's now a case of the time honored "Champagne taste but Beer pocketbook" syndrome. One might covet a BMW X5 but can only afford a Chevy Traverse. One might desire an iPhone XS Max but can only afford an iPhone 7. As the article points out it's about ASP's and margins, not about making a phone affordable by the masses. The Mac isn't and never was a PC for the masses either. Most of the world runs on Windows and Android. Most of the world drives Kia's and Toyota's. Apple has decided to cater to the premium market. It may leave me behind but I understand the motive. No, I can't afford a tricked out iPhone XS Max but Apple will sell a lot of them to people who can. For those of us who want the Apple karma an iPhone 7 will do. However, I CAN afford an iPhone XR and I think this phone will be the top seller.

    What I don't get is how these same people don't seem to have an issue with other premium market products like automobiles, watches, stereo systems, speakers, headphones. I can't afford a set of speakers that cost $15K each but apparently others can. Nor can I afford a $10K HDTV but hey, whatever.
    If Apple can release an A11 SE-sized iPhone in March that would be a little monster! The price would look like $499 or less.

    Good thing you don't repeat the "rich people are stupid" cliche that runs on iKnockoff fans' lips. 
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