Apple Unveils iPhone 15 Family: What’s Next for the Stock?

Apple yesterday, on September 12, introduced iPhone 15 Pro and iPhone 15 Pro Max, which are made from aerospace-grade titanium to make them both strong and lightweight, making them Apple’s lightest Pro models ever. The new design also features contoured edges and customizable action buttons so users can personalize their iPhone experience. Powerful camera upgrades deliver incredible image quality equivalent to seven professional lenses, including a more advanced 48MP main camera system now standard with support for new ultra-high resolution 24MP, next-generation portraits with focus and depth control as well as improved Night Mode and Smart HDR, plus a new 5x telephoto camera exclusive to iPhone 15 Pro Max. A17 Pro sensor enables next-generation gaming experiences and professional performance.

Unfortunately, this much-anticipated event was overshadowed by the earlier news, that China ordered its state officials and ministerial workers to cease using iPhones for likely info leakage and security reasons. China is a very important market for Apple, both in terms of sales and manufacturing/assembly. It’s a well-known fact, that more than 90% of iPhones, AirPods, Macs, and iPads are manufactured in China. Zhengzhou, in particular, is dubbed as “iPhone City”. In terms of sales, about 19% comes from China. Since analysts expect total fiscal 2023 sales of $407 billion, we're talking about eyebrow-raising $77 billion. In addition, sales from China are of higher quality because profit margins are higher: around 35%. In short, this market is crucial to Apple.

As a result, AAPL stock nosedived yesterday by 1.71%, while today’s premarket shows it’s rebounding by an unconvincing 0.64% at the time of writing. It’s important, therefore, not to overestimate the fallout from the iPhone 15 presentation, also eyeing today’s worrying inflation data on the U.S. The stock may well go lower down the road, before it would gain intrinsic strength to recover.