As anticipated, Apple’s (AAPL) two new iPhones received blockbuster response from customers. Per Apple, four million orders were placed in the first 24 hours for iPhone 6 and the bigger-size 6 plus, which crushed all previous records.
Apple unveiled the two new iPhones at an event on Sep 9, 2014 and started taking pre-orders from Sep 12. The company announced that the demand for both the iPhones exceeded current availability. Hence, some pre-order customers may have to wait till October to receive the devices.
Apple will ship the two devices at Apple retail stores beginning Sep 19. Carriers and Apple partners — AT&T (T), Sprint, T-Mobile and Verizon Wireless — and authorized retailers — Best Buy (BBY), Target and Wal-Mart (WMT) — will also start selling the devices on the same day.
Along with the United States, Apple will release iPhone 6 and 6 plus in Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the United Kingdom on Sep 19. The devices will be made available to 20 more countries on Sep 26.
We believe that the overwhelming response from users reflects pent-up demand for the bigger screen iPhone. iPhone 6 has a screen size of 4.7” while iPhone 6 plus boasts a phablet-like screen size of 5.5''. Apple’s older iPhone 5S has a screen size of 4”.
Apart from a bigger screen size, iPhone 6 offers higher resolution (1334×750 pixels), new Retina HD display, faster CPU clock speed (2×1.4 GHz), more battery power (1810 mAh), more internal storage (128 GB version available for the first time) and substantially better video recording quality (1080×60 fps).
The new iPhone 6 comes with near-field communication (NFC) technology, runs on new 64-bit A8 chip and include Apple’s new iOS 8 mobile operating system. The availability of NFC in iPhone 6 will enable customers to use Apple Pay, scheduled to be introduced this October.
However, iSight camera (8-megapixel) and front-facing camera (1.2-megapixel) remained almost similar to iPhone 5S with minor changes. Apple did not offer any new upgrade for its Touch ID fingerprint sensor. The highly-anticipated Sapphire glass was also not used in the iPhones.
Here is a comparison between iPhone 6, Samsung Galaxy S5 and HTC One M8:
|
Apple iPhone 6 |
Galaxy S5 |
HTC One M8 |
|
|
Starting Price |
$199 |
$199.99 |
$199.99 |
|
Screen Size |
4.7” |
5.1” |
5” |
|
Storage |
16/64/128 GB internal |
16/32 GB internal, MicroSD slot up to 128 GB |
16/32 GB internal, MicroSD slot up to 128 GB |
|
OS |
iOS 8 |
Android Kit Kat |
Android Kit Kat |
|
Processor |
A8 Chip 64-bit architecture, M8 motion coprocessor |
Qualcomm Snapdragon 801, Quadcore 2.5 GHz Krait 450 |
Qualcomm Snapdragon 801, Quadcore 2.3 GHz Krait 400 |
|
Camera |
8 MP iSight, 1.2 MP front-facing |
16MP primary, 2MP front-facing |
4 MP primary, 5MP front-facing |
|
RAM |
1 GB |
2 GB |
2GB |
iPhone contributes a significant portion of Apple’s top line. We believe that the surging demand for the all-new iPhones will be the key growth catalyst for Apple over the next 12 months.
We also believe that the huge pre-order size will test Apple’s supply chain capability that can be a headwind in the near term. The company is yet to set a date for China release, its fastest growing market. We believe that pricing of the new iPhones is a key concern, which may hold back Apple from releasing the device in China. However, this delay will hurt Apple’s market share in the country due to stiff competition.
Apple has a Zacks Rank #3 (Hold).
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