iPhone 14: ‘Worst kept secret’

Investors hoping the iPhone 14 series introduction will help Apple Inc. stock recover their January record may be disappointed if history is any guide.

Investors hoping the iPhone 14 series introduction will help Apple Inc. stock recover their January record may be disappointed if history is any guide.

The stock has fallen seven times in the past decade the day the company launched a model. When it announces the new iPhone on Wednesday, Apple will likely take shareholder-friendly steps, such as higher prices, to protect its margins from inflationary pressures, analysts say. However, such moves come during a weakening economy that makes buyers reluctant to pay more for a handset.

“Apple’s fall iPhone launch event has always been its ‘worst kept secret’, with investors aware of most of the product offerings announced at the event,” wrote Samik Chatterjee, an analyst at JPMorgan Chase & Co. ., in a note . “Investors will be watching iPhone prices closely amid an increasingly challenging macro with consumer spending concerns.”

Historically, the stock has tended to recover a few months after the event as the first sales figures trickle in. But even that delay has evaded stock following the last two iPhone announcements. Apple’s stock is down 13% this year, en route to their first annual decline since 2018.

Some analysts predict Apple will raise prices for its more expensive Pro models aimed at a more affluent customer base, while lowering older phones to lure budget-conscious buyers.

Wamsi Mohan, an analyst at Bank of America Corp., expects a 20 cent increase in earnings per share if Apple raises the prices of its Pro models by $50.

Price increases are important because Wall Street is counting on Apple’s growth in earnings per share to outpace revenue growth. Analysts predict earnings will rise 9% in 2022 and 6% next year, compared with forecasts for annual revenue increases of 7% this year and 5% next, according to data collected by Bloomberg.

Apple is the top-performing mega-cap technology stock this year as investors feel confident in its ability to tap into its more than 1 billion customers to monetize its services, including apps, video, fitness and gaming subscriptions.

The next catalyst for the stock will be earnings for the September quarter, which will be reported in late October, said Gene Munster, managing partner of Loup Ventures.

“At that point, I expect Apple to reassure investors that while Apple is not immune to a slowdown, demand for their products remains and sales will grow year over year in the December quarter,” he said.

Technical card of the day

It has been a difficult year for technology stocks and that is reflected in the 26% drop in the Nasdaq 100 Index. While the meter is on track for its worst performance since 2008, it still outperforms another speculator favorite, Bitcoin. The cryptocurrency, which has fallen nearly 60% this year, traded slightly lower to around $18,888 as it moves closer to its 2022 low.

Top Tech Stories Sundar Pichai, chief executive officer of Google parent Alphabet Inc., has defended the internet search giant against claims that it is anticompetitive, citing established rivals in the digital advertising market and the fledgling mobile app TikTok as examples of stiff competition in technology. Xi Jinping again called on China to step up the development of technology critical to national security, and issued a strong reminder, just as escalating US sanctions threaten Beijing’s efforts to become self-sufficient in semiconductors.

Tencent Holdings Ltd. plans to more than double its stake in Ubisoft Entertainment SA, forging its last major overseas deal and providing the founding Guillemot brothers with capital to get the video game company back on track. Ubisoft shares plunged as much as 17% as the investment means a full-scale takeover of the company is unlikely. Ubisoft will announce several new games in the Assassin’s Creed franchise on Saturday, including one set in feudal Japan, according to media reports and those familiar with the company’s plans.

The attorneys at Twitter Inc. are using Elon Musk’s text messages to convince a Delaware judge that the billionaire wants to pull out of his $44 billion deal to acquire the company because of the buyer’s remorse, rather than worrying about the spam or bot accounts of the social network. According to Senator Amy Klobuchar, the bill’s lead sponsor, an “incredible onslaught of money” against a landmark bill designed to curb the power of America’s largest tech companies has posed an obstacle to passing the legislation.

Six Gulf Arab states have launched streaming service company Netflix Inc. told to stop broadcasting material they believe violates the Islamic values ​​of the region, and threatened legal action if it did nothing.

South Korean Samsung Electronics Co. warns that the semiconductor industry could face a rock by 2022. A senior executive at the world’s largest memory chip maker said the outlook for the second half is bleak and Samsung sees no momentum for a recovery next year.

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