Apple (NASDAQ:AAPL) unveiled the iPhone 15 on Tuesday, which, in my view, is going to be a flourishing successor for the tech giant. Despite the usual mixed reactions following major Apple announcements, I see this event as a resounding success. Apple has once again harnessed its unique formula — seamlessly blending innovation with familiarity, a combination that consistently appeals to both consumers and investors. While market noise may bring short-term volatility to Apple’s stock, I maintain a bullish outlook.
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Is Apple’s iPhone 15 More of the Same?
The unveiling of Apple’s iPhone 15 has stirred the familiar refrain: “It’s more of the same.” However, let’s delve deeper into this assertion, for it carries significant weight. You see, the iPhone is not just any product in Apple’s arsenal. It stands as the flagship and is responsible for almost half (48% in fiscal Q3) of the tech giant’s sales. Thus, any iteration of this iconic device is nothing short of momentous.
So, is it accurate to claim that the iPhone 15 treads familiar ground? To a certain extent, yes, but should we perceive this continuity as a negative? Absolutely not. In fact, it’s a testament to Apple’s remarkable understanding of its consumer base. What the faithful patrons of Apple consistently desire is a harmonious blend of the familiar and the novel.
Of course, innovation is essential, as it serves as the spark that ignites excitement and motivates individuals to upgrade their devices. However, beyond these incremental advancements, there exists little rationale for altering an already exceptional product. The iPhone 15, like its predecessors, serves as a refined embodiment of this philosophy. It gracefully maintains the aspects that users cherish while judiciously integrating innovations to enhance the overall experience.
Demand for iPhone 15 Should Remain Very Strong
In my view, the demand for the iPhone 15 will be very strong, driven by the same enduring reasons that have consistently fueled interest in each preceding model — the allure of a new design, merely for the sake of novelty, but mostly the desire for a device that seamlessly enhances our daily lives. What iPhone users (myself included) want is the continuation of that same exquisite phone they’ve come to adore but with added features that elevate their experience. This is where the iPhone 15 shines.
The introduction of the Action Button in the iPhone 15 embodies this philosophy perfectly. It doesn’t overhaul the appearance. Instead, it enhances functionality, enabling improved multitasking capabilities and quicker navigation. It’s a subtle change that carries profound implications for users’ daily interactions with the device.
Now, for creators and power users who have witnessed the remarkable performance of the iPhone 13 and 14, the marginal improvements in the iPhone 15 Pro’s A17 Bionic chip may not raise eyebrows. That’s totally fine. Its predecessors already delivered processing and rendering prowess par excellence.
Where the iPhone 15 truly leaves a mark is in its main camera, including quadrupling the MP (megapixels) to 48. Here, Apple knows that tangible improvements where it actually matters can deliver great value, particularly benefiting the ever-expanding community of creators.
In essence, Apple’s approach to iPhone evolution may appear incremental, but it’s precisely these incremental adjustments that have a significant impact on these otherwise beloved devices. Thus, the same can be said for the incremental improvements in Airpods and the Apple Watch.
Apple’s Valuation Combined with Uncertainty May Cause Volatility Ahead
Despite my confidence in Apple’s iPhone and upgrades regarding Airpods and the Apple Watch, I can see Apple stock being subject to some shorter-term volatility. This could be attributed to the combination of market noise and speculative activity that typically follows such events, compounded by the stock’s hefty valuation. At nearly 30 times this year’s projected earnings, Apple’s valuation doesn’t provide any margin of safety against wild stock wings.
That said, I believe that Apple is a stock to own, not one to trade. The company has consistently proven that it can grow its earnings into its valuation. Thus, while the current multiple is a premium one, I believe it shouldn’t really matter over the long run. The fact that Apple stock has consistently reached new all-time highs after every speculative period in its history is a testament to this notion.
What are Analysts Saying About AAPL?
Turning to Wall Street, Apple features a Moderate Buy consensus rating despite its elevated valuation. This is based on 22 Buys and eight Holds assigned in the past three months. At $207.46, the average Apple stock forecast suggests 18.2% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell AAPL stock, the most accurate analyst covering the stock (on a one-year timeframe) is Krish Sankar from TD Cowen, with an average return of 93% per rating and a 49.16% success rate. Click on the image below to learn more.
The Takeaway
Overall, the iPhone 15’s blend of familiarity and innovation reflects Apple’s profound understanding of its user base. Demand for the iPhone and, therefore, Apple’s overall ecosystem should remain very strong. Short-term stock volatility may occur, influenced by market noise and Apple’s relatively expensive valuation. Nevertheless, for long-term investors, this is a stock to own, not to trade. In that regard, there is no significant reason for Apple bulls not to remain bullish.
