Apple Inc. (AAPL) has been reportedly planning to launch a mini version of the iPhone 6 in 2015. Rumors have been making the rounds ever since the company launched the large-screen versions of its flagship product – iPhone 6 and 6 Plus. However, latest updates suggest that the company is keen on launching a 4-inch version of iPhone 6 if it guarantees a minimum of 10 million units per year.
While iPhone 6 and 6 Plus sales are touching new highs, a section of iPhone users still prefer smaller iPhones. We believe that with more variety in iPhone 6 sizes, Apple would be able to target a vast user base of those willing to upgrade to the iPhone 6.
Further, with the prospective launch of the iPhone 6 mini, the company could offer a better budget option for those who have been avoiding switching to the latest iPhone 6 because of the hefty price tag. Although the price of the mini version has not been fixed, it is likely to be somewhere between the entry-level iPhones and the latest iPhone 6.
We believe that the launch will cash in on the market buzz created by strong sales of the new iPhones. Since the Sep 2014 release, the iPhones created record demand far exceeding that of the previous versions of iPhone. Apple intends to sell the new iPhones in approximately 115 countries in the near term, marking it the fastest roll-out in the history of the device.
In addition, the iPhone maker will launch the iWatch in early 2015, which is expected to be a major hit. The watch offers several features including Apple Pay and Siri support that distinguish it from other smart watches currently available. We believe that the nascent smartwatch market with a few well-established players presents a good opportunity for Apple.
Market research firm IDC foresees 2014 worldwide shipments of wearable computing devices to increase threefold from 19 million units in 2013 to 112 million units in 2018. Apple’s loyal customer base is a huge competitive advantage. The company even hired executives from Tag Heuer, Burberry and Yves Saint Laurent to develop the sleek and fashionable look of the device. We expect Apple’s iWatch to broaden its revenue base.
Apple currently sports a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other stocks in this technology sector worth considering include Stamps.com Inc. (STMP) and Callidus Software Inc. (CALD) with Zacks Rank #1 and Geeknet, Inc. (GKNT) with a Zacks Rank #2.
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