Apple’s iPhone 13 event: What the analysts are saying

Excerpts from the notes I’ve seen, more as they come in.

Katy Huberty, Morgan Stanley: Can Improved iPhone 13 Affordability Drive Demand? Today’s iPhone launch event was in-line with our expectations both from a feature set and pricing perspective, although Apple still managed to sneak in a few surprises, such as a new 1TB iPhone model and new iPads. In our view, the most incremental takeaway is that despite relatively unchanged like-for-like iPhone pricing compared to the iPhone 12, the introduction of higher end iPhone storage SKUs is likely to drive Y/Y iPhone ASP growth. At the same time, higher iPhone trade-in values and more aggressive carrier promotions make iPhone 13 more affordable for consumers. When combined with iPhone replacement cycles that remain elongated, 5% 5G adoption within the iPhone installed base, fully reopened retail stores, and elevated iPhone backlog entering FY22, we remain bullish on the prospects for iPhone growth in FY22, with the potential for upside vs. our current iPhone ASP forecast (-1% Y/Y). Overweight. $168.

Martin Yang, Oppenheimer: New iPhones Remain Compelling Drivers for Upgrades. While the iPhone 13 family offers mostly incremental improvement from last year, their combination of new features, upgraded storage, and same price points will likely attract upgraders (users on iPhone X or older models). Also, we believe, given strong inflationary pressure on smartphone supply chain this year, that iPhone 13 will offer better relative value over Android flagships, sustaining its appeal for switchers. Lastly, we believe Apple’s dominance in tablet and smartwatch, remains unchallenged following the latest refreshes. Outperform. $165.

Kyle McNealy, Jefferies: Check Out Those Carrier Promotions. One of the most important elements of the iPhone 13 launch from our perspective is the carrier promotions (and effective subsidies) that are coming through even bigger than the strong promotions last year. At launch, all three major carriers in the US are advertising promotions for a free iPhone 13 ($800) for qualifying customers subject to certain terms. AT&T’s promotion will offer customers an iPhone 13 Pro ($1,000) for free and T-Mobile’s promotion through Apple will even cover the cost of an iPhone 13 Pro Max ($1,290) if you’re trading in a 12 Pro Max. Across the board, we see the promotions as more aggressive than last year – they’re either a higher dollar value or don’t require a net-new line. Buy. $175. 

Wamsi Mohan, Merrill Lynch: Impressive technology in new products, but will it help drive upside to the stock? Apple introduced the iPhone 13, Watch Series 7 and iPad/iPad Mini and highlighted the power of its ecosystem with TV+, Fitness+ and the creativity that can be achieved with its tightly integrated software and hardware. However, the bar for F22 growth is high given (1) Product announcements today are incremental and we view consensus expectations of roughly flat iPhone unit and ASPs for F22 as unlikely to materialize vs. our 241mn/210mn for iPhones in F21/F22 despite ongoing carrier incentives, (2) Waning of stimulus benefits will create a mix headwind toward lower priced devices (attractive iPhone 11 at $499), which the newer highest end SKUs are unlikely to offset, (3) The timing of the iPhone launch creates an almost certain sharp deceleration in growth in the March qtr (possibly even in Dec qtr), (4) iPad revs of ~$30bn in F21 are 50% higher than the typical $20bn annual revenues which could be a function of pull-in of demand during COVID and (5) Regulatory issues (EPIC and Google) could create a headwind to the valuation multiple in the near term as investors recalibrate the risk to Services growth trajectory. Neutral. $160. 

Angelo Zino, CFRA: Maintains Buy opinion. We believe the biggest takeaways are AAPL’s pricing strategy, which remains unchanged across all product categories, as well as availability of devices on 9/24. All four iPhone devices return with no notable changes to the aesthetics but include internal upgrades (A15 Bionic, longer battery life, higher entry level storage), an enhanced camera system, and new Photographic Styles/Cinematic mode. The iPhone 13 Pro and iPhone 13 Pro Max will carry a new storage capacity of 1TB. Buy. $160.

Harsh Kumar, Piper Sandler: Thoughts on iPhone 13 Announcement. In our eyes, there were no revolutionary announcements, as most of the new hardware items were redesigns and performance improvements from previous generations. However, we believe the announced iPhone trade-in programs (up to $700 for the iPhone 13 and up to $1,000 for the iPhone 13 Pro) will continue the 5G iPhone upgrade momentum. Based on our due diligence, trade-in programs have led to strong demand for the iPhone 12, and we do not see it slowing down this cycle as 5G continues to push the needle forward. Overall, we continue to be impressed with the increased usability and performance of each new generation of Apple products. Overweight. $175. 

Amit Daryanani, Evercore: iPhone Upgrade Cycle Ready to Inflect? Watch Steals the show. We think the iPhone upgrades were largely as expected and while not a material upgrade from iPhone 12, we think the incremental features will make this a compelling product for the 900M+ iPhone users that didn’t purchase the iPhone 12 – ensuring the iPhone cycle sustains into CY22… The Watch also received a compelling upgrade with a 20% increase in screen space, which enables typing on a full keyboard and an improved battery that allows for faster charging. Though we would note, AAPL didn’t provide an explicit timing on when the next gen watch will be available. Outperform. $180.

Gene Munster, Loup Ventures: Apple’s Virtuous Cycle of Mutual Benefit. Apple’s annual flagship event was another iteration of providing products with increasing value to consumers at largely consistent prices. This is what we refer to as a virtuous cycle of mutual benefit. A product provides increasing value to the consumer at the same or lower price point, while more value accrues to Apple as it continues to grow its monetizable device base. Companies that participate in this virtuous cycle are most likely to continue to gain market share and expand market cap.

Daniel Ives, Wedbush: Initial Takeaways on the Virtual Launch. The iPhone Pro (starts at $999) was front and center with some major camera advancements (e.g. macro photography) including a new ultra wide camera capabilities and significant pixel upgrades as well as all day battery technology built in. The headline is that Apple is introducing a 1 terabyte option for the iPhone 13 Pro which is a potential game changer. Pre-orders kick off this Friday for the new iPhone 13. Overweight. $185.

Mathew Olson, The Information. Reality Check. The Lidar scanner didn’t even get mentioned during Apple’s (incredibly long) segment hyping the 13 Pro phones as cinema-quality filmmaking tools. It’s almost bizarre how little attention was given to AR in general. However small the avid user base for mobile AR is, I’d wager it’s bigger than the number of people who genuinely need or want cinematography inspired-tricks for their iPhone. Maybe Apple erred on the side of saying nothing for fear of having too little to show right now.

See also:

16 Comments

  1. Adam Stein said:
    Yeah because the billions of people who post on Instagram and tiktok every week need LIDAR instead of better video. What?

    7
    September 14, 2021
  2. bas flik said:
    agree, camera is now most important feature on the phone.
    lidar is too difficult for people. gaming and camera.

    3
    September 14, 2021
    • Romeo A Esparrago Jr said:
      Yes, Adam & Bas,
      I tried LIDAR once to make a 3D scan of my home office. Last time I purposely used the feature.

      The camera & its app ecosystem, I use daily. Subconsciously reaching for it at times. I sometimes discover I’ve taken wonderful pics or vids I forgot I took LOL.

      I call my iPhone my camera. Second only to its use for messaging.

      1
      September 15, 2021
  3. Daniel Epstein said:
    The Video/Film industry gets a lot of mindshare considering the size of the business. I still consider myself in the video business but realize that it is actually quite small revenue wise compared to Apple selling 5 to 6 Billion a week in products and services in a slow quarter. We all need things to see and read on our devices. When Apple changed FCP 7 to FCP X my industry through a fit! Many thought Apple would suffer but it is really hard to see any problems for Apple since then. So the new phones will be must have for many in my business! It is not the big market but it is good mind share.

    1
    September 14, 2021
  4. Horace Dediu said:
    Mathew apparently never heard of Tiktok or YouTube.

    9
    September 14, 2021
    • Fred Stein said:
      Agree, upvoted.

      Mathew seems to have missed the whole point.

      Apple’s incremental improvements gave a kick to its potter’s flywheel, or virtuousl cycle, as Gene puts it. All the products increase the value of Apple to the ecosystems of creators and consumers whether in educations, mobile games or video. As producers and consumers in these areas upgrade, their high quality used Apple devices go to new users, growing the ecosystem.

      0
      September 14, 2021
  5. Gregg Thurman said:
    Just as soon as I decide between Verizon (my current carrier) and T-Mobile (much better coverage and incentives) I’m buying the 13 Pro Max. I don’t need all that it does, but with a net cost of about $500 why not?

    1
    September 14, 2021
    • Gregg Thurman said:
      T-Mobile is doing its best to convert me. Between my iPhone 10S Max trade-in, and switching from Verizon, my cost for a new iPhone 13 can be as low as $0.00 with an unlimited data plan for $55/month. For an extra $20/month (unlimited data plan) I can switch carriers for my 5G iPad Pro.

      1
      September 14, 2021
  6. Ralph McDarmont said:
    I imagine many so called investors don’t understand what it means to double chip speed, memory, camera performance and screen resolution. On everything Apple makes. These improvements are expensive and revolutionary and they occur quite often. Apple has led the way for every copycat in the business. Always been that way. Consider Samsung, the definition of leach. The patent theft situation is indescribably criminal.

    5
    September 14, 2021
  7. Alan Trerise said:
    Regarding AR, the phone and watch upgrades are smaller increments lately because a majority of the effort is going into buttoning up the AR goggles. I’m certain its a full court press to get those out in 2022. Apple moves personnel around to make deadlines.

    0
    September 14, 2021
    • John Konopka said:
      I’ll have to watch it again to be sure, but I think there was an interesting bit of AR in the iPad mini video. There was a tech viewing equipment with the camera and as he panned over different parts some sort of information about the scene popped up. Looked cool.

      2
      September 14, 2021
  8. Jerry Doyle said:
    I have the Apple Watch Series 6. In the absence of any new health features being introduced, I accepted that I would not be upgrading. Until …. Lordy, Lordy, that 20 percent increase in screen real estate! Now my appetite to get the Series 7 is a growling hunger pain. I am using my Watch ever more which seems to be usurping my use of the iPhone when I am on the go. The larger real estate screen will make texts, emails, notifications, maps, restaurant selections, using safari, mathematic computations, everything to do more like I am doing it on my iPhone. Can’t wait for the Watch to go on sale and learn what Apple will offer me for my Series 6. 🙂

    2
    September 14, 2021
  9. Jerry Doyle said:
    Another observation relative to the Watch. The new Series 7 did not appear to have the “rectangular” design similar to the iPad Pro as many had prognosticated. It still appeared to be a curve edge design. Am I missing something here or did others notice too?

    0
    September 14, 2021
    • Aaron Belich said:
      Watch rumors were mostly wrong.

      0
      September 15, 2021
  10. Darren DMW said:
    Jerry. Correct. Obviously the rumour of a larger screen was correct but the mongers did not know how to process it. They couldn’t imagine a curved screen as a way of mitigating the bezel, so they were unimaginative and assumed it would be a miniature iPad. I always thought that design looked like a computer on your wrist and not as attractive as the iconic Apple Watch look and feel.

    2
    September 15, 2021

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