Apple AAPL is likely to come up with a new version of iOS and macOS at its 2018 annual Worldwide Developers’ Conference (WWDC) set to begin on Jun 4.The company announced on its website that the session will involve “100 technical and design-focused sessions presented by Apple engineers to
Apple, to keep up its sales, is now rumored to launch three variants of iPhone in 2018. We believe the launch of a cheaper version of iPhone will help it combat rising competition from cheaper Chinese smartphone makers.
Notably, the company is also rumored to be working on new “high-end, noise-canceling, over-ear” headphones, upgraded versions of AirPods with advanced Siri integration and next generation of smart speaker HomePod with face ID technology.
The company is expected to bring new augmented reality features, new Animojis, an upgraded version of Do Not Disturb and a stock tracking application, as reported by Blooomberg. A tool to provide increased parental control over smartphone usage of children is also on the making.
We believe that the launch of these products will help Apple expand its global foothold and increase market share further. Notably, shares of Apple have gained 28.2% in the past year, significantly outperforming the S&P 500’s 16.3% rally.
First Trillion-Dollar Stock?
Moreover, Apple, with a market cap of $913.17 billion, is not far from being the first trillion dollar company. The strength in its products and ecosystem coupled with the brand loyalty that it enjoys gives it an extra edge over others. It is widely perceived that Apple users refuse to switch to any other platform that isn’t running on iOS.
Apple enjoys the support of Warren Buffett. Berkshire has been raising its stake in the tech giant, ever since it made its first investment in May 2016.
Apple Inc. Revenue (TTM)
Strengthening Product and Ecosystem
The iPhone has always been the mainstay behind Apple’s top line performance. The spurt in revenues from iPhone in the last reported quarter can be attributed to higher iPhone average selling price (ASP), despite a decline in total shipment.
Moreover, Apple’s focus on developing innovative products in order to generate new revenue streams is prudent in our view. Notably, Apple’s Services segment, which includes Apple Music, among others, is in top gear. Apple Music subscriber base recently hit 38 million. The company is also investing $1 billion on original content, to compete with leading players on the field like Netflix NFLX .
Apple’s Other Product segment, recorded a new all-time high in the last reported quarter with revenues of more than $5 billion. Apple’s growing dominance in the wearables market is a key catalyst, with Apple Watch growing 50% year over year for the fourth consecutive quarter.
Per NPD’s latest Worldwide Quarterly Wearable Device Tracker report, Apple has become the leading player in the wearables market in 2017, courtesy of Watch. At 2017 WWDC, the company unveiled watchOS 4. An update to watchOS is anticipated this year as well.
However, as with all Apple products, price point remains a concern. HomePod carries a heftier price tag compared with Echo and Google Home. Nonetheless, we note that Apple’s brand is something that gives it an edge over its competitors.
Per International Data Corporation’s latest estimates, the overall wearables market is expected to witness CAGR of 18.4% from 113.2 million shipments in 2017 to 222.3 million in 2021. The firm also expects Apple Watch to lead the smart watch category, which is expected to witness CAGR of 22.7% from 2017-2021.
Apple carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.