Did Apple (NASDAQ: AAPL) change the world with the launch of its 10th anniversary iPhone last Tuesday?
Did it shake the world with revolutionary innovations like Steve Jobs did with the first iPhone back in 2007?
Unfortunately, the answer is a big fat NO.
It appears that Tim Cook and his team made the smallest changes possible to inch forward the capabilities of iOS-powered smartphones in order to keep the money rolling in.
Now, to be clear, the triple debut of the iPhone 8, 8 Plus, and X won’t be failures. But like many others, I was hoping to see more vision and bravery rather than the safety first business decisions of a company that appears to be scared to make any radical changes.
To be sure, there’s nothing wrong with this. But after all the secrecy, hype, and fanfare, the unveiling was just a little disappointing…
Embarrassing First Impression
Usually, Apple talks a good game during launch events about looking toward the future, revolutionary technology, and delivering unique experiences to its consumers.
But an unfortunate glitch in the Face ID presentation this year left an awkward pause and a rather embarrassing first impression for the new iPhone feature.
The company blamed the Face ID glitch on a lockout mechanism that was triggered by staff members from the device ahead of the iPhone X’s unveiling.
Apple’s software chief dealt with the hiccup by moving on to a backup device, which worked as intended.
But the hitch was widely reported nonetheless.
Yahoo News was the first to report the incident, and tech writer David Pogue had the following to say about it:
People were handling the device for the stage demo ahead of time and didn’t realize [the] Face ID was trying to authenticate their face. After failing a number of times, because they weren’t Craig [Federighi], the iPhone did what it was designed to do, which was to require his passcode.
Apple later confirmed to BBC News that this quote was indeed real.
So, despite the incident lasting only 10 seconds in a nearly two-hour-long presentation, it still has the potential to undermine confidence in the company’s newest tech…
Are These New Features Really the Best They Could Come Up With?
Dubbed the “rich people’s” iPhone, are the features embedded in Apple’s anniversary smartphone worth the hefty $999 price tag?
It doesn’t really look like it…
This is a rich people phone, writes Andy Hargreaves of KeyBanc, which was not at all what he was expecting:
We were disappointed by the lack of meaningful incremental functionality in the iPhone X vs. iPhone 8/8 Plus. This view was magnified by the $300 price premium for the iPhone X vs. iPhone 8, a substantial increase that seems justifiable only for relatively rich people who care deeply about the appearance of their phone. We believe this is a smaller group than we previously estimated and are lowering our estimated mix of iPhone X units to 22% of total volume in FY18 from our previous estimate of 32%. The lack of compelling features in the iPhone X also raises longer-term concerns about Apple’s pricing power. While the Company clearly retains extraordinary brand loyalty and a strong hold on consumers through network effects, content lock-up, and learned experience with iOS, compelling new features are essential to maintain upgrade rates and prevent trade-down activity, in our view. The iPhone X suggests compelling new features may be difficult to come by going forward, which could imply a period of elongating average holding periods and falling ASPs after a peak in FY18.
And he’s not too off the mark. The newest features on the iPhone X boast nothing radically new or exciting.
Others have written that the hotly anticipated addition to the iPhone line was largely “disappointing,” offering a product that “lacks incremental functionality” to justify its hyper-inflated price.
The new Animoji feature has been mentioned as one of the top five features of the anniversary edition.
With a world of rich possibilities, Apple could have talked about greater augmented reality (AR) experiences, being lifted into games and digital spaces, or could have shown some real gee-whiz applications with real-world uses and practicalities.
Instead, the company decided to have its debut audience applaud an animated poop.
Just read that sentence again. Apple’s team decided that the best use of stage time was with the abovementioned demonstration.
Other features include a corner-to-corner OLED display, wireless charging, and an amped-up camera.
To make matters even worse, there’s nothing that the iPhone X can do that Samsung’s (OTC: SSNLF) Galaxy S8 — unveiled just a few months ago — can’t.
And Apple’s stock has definitely paid the price for these disappointments. Before the debut, analysts and experts were hoping that the unveiling would drive the stock price over the $200 mark, driving Apple’s valuation toward $1 trillion.
But Apple’s stock on Tuesday closed 0.4% lower at $160.86 as a rally to nearly $164 during the event proved that it didn’t have the desired staying power the company had hoped for.
On Wednesday, the stock closed lower again by 0.8% at $159.65 after briefly trading below $158.
The stock price remains hovering around the $159 mark.
Wall Street analysts have thus designated Tuesday’s big reveal as a big flop.
The Bottom Line
Apple has decided that it doesn’t want to define the future.
Instead, the tech giant is happy making safe updates, rolling out its new iPhones in glitter, and taking our money.
It’s not using its advantages for pushing the narrative forward or for changing the definition of smartphones.
The company has decided to diminish the effects of AR on smartphones and to repurpose ideas from other manufacturers.
And Apple has also decided to move its hardware forward by the smallest possible amount in order to maximize revenue and also ensure that the faithful users continue to upgrade their handsets and stay on the iPhone path.
That’s all for now.
Until next time,
John Peterson
Pro Trader Today