How to Interpret Apple's Product Launch and Upcoming Earnings Report?
Apple recently hosted a product launch event where they primarily showcased new Macs and their latest 3nm M3 chip series, comprising of M3, M3 Pro, and M3 Max, which offer significantly improved performance and are expected to boost the Mac business.
The 24-inch iMac with the M3 chip is priced at $1,299, while the new MacBook Pro costs $1,599. However, the current consumer environment is not favorable, and there is limited innovation besides the new chip. As a result, demand is mainly driven by replacement needs.
Apple is set to release its earnings report after the market closes on Thursday. Here are some predictions for the company's performance:
- There is a high correlation between iPhone revenue and shipments. Currently, there is a significant difference between market research firms regarding Q3 23 iPhone shipments. According to IDC data, there has been a year-on-year increase of 2.5%, while Canalys data shows a 6% decline. IDC's forecast is generally more conservative, and Apple's iPhone business revenue growth often performs better.
- Mac and iPad revenue are expected to decline by double digits YoY due to the absence of significant new product releases in the previous period.
- Service revenue is expected to recover, mainly due to the recovery of the gaming and advertising businesses. Apple announced a 30-40% price hike for subscriptions to Apple TV+, Arcade, and News+.
Predicting short-term fluctuations in Apple's stock price is challenging due to multiple events. Disagreements about iPhone shipments have led to increased uncertainty in the market, resulting in a downturn in the stock price and posing a substantial short-selling risk.
Looking ahead in the medium-term, Apple still faces competition from Huawei, temporary lower sales of the iPhone 15 compared to the iPhone 14, and a risk-free interest rate of up to 5%. With slow revenue growth in the 23 fiscal year and zero profit growth, driving up valuations is challenging, and there are fewer opportunities for long positions. However, the stock price fluctuations are mainly influenced by the broader market.
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73897327 : I just bought the Mac pro with M2 chip...
Noah Johnson OP 73897327 : Hahahh. How is it? Is it good?