Another iPhone is coming! Is that even still “a thing?” It’s not with investors – as the novelty has more than worn off.
Shares of Apple have fallen 6.6% in the 30 days prior to Wednesday’s widely anticipated announcement of the iPhone 6S. That’s a highly unusual move for the stock that has raced higher by an average of nearly 5% in the 30 days prior to the previous eight models. It’s the first time Apple’s stock has fallen leading up to an iPhone launch since the original iPhone in 2007 – ending what had been a dependable source of returns for investors.
Investors are counting on Apple to keep the excitement going over its aging iPhone smartphone line, which was first introduced more than eight years ago. The company gets two-thirds of its revenue from this single product line, 74% of its gross profit from the iPhone and this one product accounts for 61% of its stock price, says Trefis.com. Other new products including the iPad, Apple Watch and Apple Music have failed to meaningfully diversify the company’s offerings – especially profitability.
It used to be that we’d hear in advance of the next-generation of hardware to launch; then we started hearing about it just before the launch of whatever the current-gen was going to be (hearing about the iPhone 6 before the iPhone 5S was out the gate, for example). Now it’s even more advanced; we’ve been hearing about the iPhone 6S for months, but also about the follow-on device which will launch in late 2016 as the iPhone 7, and there’s even talk of the iPhone 8 in 2018! There is pretty much nowhere now for phone makers to run and hide their top secret plans to prevent them spilling fully into the public space many months in advance of a device’s arrival, and it’s as true for Apple and its iPhones as anyone else.
The iPhone 5c, because it was largely based on the iPhone 5, save for the inclusion of LTE and improved battery life, had a significantly lower BOM (bill of materials) cost than Apple’s iPhone 5. Plastic is cheaper, easy to use, and the numbers Apple shifted made for excellent profit margins. In this respect the iPhone 5c was the iPhone 5 repackaged and sold onto consumers, with a few additional bells and whistles, as a new phone.
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Android switchers are giving iPhone sales a boost as Apple gears up to unveil the next iPhones in coming weeks.
Android devices continue to dominate handset sales in Europe but owners on older models are switching to iPhone, fuelling sales of Apple mobiles.
Just over a quarter (27 percent) of iPhone buyers across Europe’s biggest five markets have switched from an Android device in the three months to July, according to the latest smartphone sales figures by Kantar Worldpanel ComTech.