Gee, new color bands, water resistance, and 1/10 of a millimeter thinner for the iPhone 7? The suspense is killing me.
This is the first time that Apple’s stock has been flat into a major product launch. The 10 major Apple product launches have had a muted performance, -0.06%, on the day of the launch, but with a +1.39% the day after. Then again, Apple was a $12 stock the day before the first product launch.
The announced iPhone7 improvements are part of the company’s long-term strategic effort to move users into the Apple “Eco-System,” which integrates all Apple software into all Apple hardware. While taking away the headphone jack does not mean people cannot use their headphones, it will help with waterproofing and shift battery life to other new functionalities. By the way, Apple’s largest competitor, “Android,” does not have an Eco-System.
iPhone7 added functions, including wireless charging (Samsung has it), water resistance (Samsung has it), stereo speakers, integration of a greatly improved Apple Watch screen with updated processors and a GPS, enhanced camera with two lenses, and a larger hard drive, albeit welcoming, are not game-changers. It appears that the main force of the Apple Special Event was to pump new apps for their upcoming iPhone 7 and Apple Watch 2.
Critics asked “Is the iPhone 7 the iPhone 6?”
Comparing the iPhone 7 to the iPhone 6 is like comparing apples to apples.
On the bright side, Apple’s Apple Watch 2, partnered with Nike, quickly sent Fitbit’s stock tumbling down 2% before the day’s end.
Apple’s fans called the iPhone 7 launch, “A Day of Liberation,” that “we don’t need wires anymore for iPhones.”
In the short run, removing the headphone jack and power button may prove unpopular, especially for people who don’t like Bluetooth. However, it is considered part of a coordinated move to educate users to accept changes which improve the efficiency and functionality of the entire iPhone experience. Remember how much we complained about there being only one USB drive left on the MacBook and that the screen of the 6s Plus was too large? Now we can’t live without them.
Whether the IPhone7 changes will translate into Q3 revenue is still up in the air. As more than 235 million two-year-old iPhones are waiting to be upgraded, to them, any improvements of the iPhone 7 will be a plus. That being said, those same people are also waiting for the 10-Year Anniversary iPhone, which is scheduled to arrive in 2017. Hopefully, it will be significantly differentiated with an OLED display, bend-ability, and several brand new designs.
Disclaimers: Roland George Growth Portfolio currently does not own Apple stock. The views in this article does not reflect that of the Roland George Investments Program or Stetson University.