![Budapest, Hungary - December 14, 2022. iPhone 14 Pro Max in Space Black color, in box. At Apple](https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1453827184/image_1453827184.jpg?io=getty-c-w750)
József Zoltan Varga
Apples (NASDAQ:AAPL) The annual product extravaganza scheduled for this week could be a yawn. And analysts are fine with that.
The event will likely only introduce incremental improvements, such as the forced switch to USB-C charging ports and titanium housing, and do not make large splashes.
It’s exactly that consistency in progress in exchange for incremental price increases that makes Apple (AAPL) a winner, according to Jefferies analyst Andrew Uerkwitz.
“Apple has been very consistent in build quality, software updates and thus increasing market share,” Uerkwitz wrote in a letter to customers. “Moreover, it has also consistently shown that incremental improvements are a fair trade for incremental price increases.”
A bit of lull could be a welcome relief after shares fell 6% on reports that China could ban government officials and state-controlled companies from using the tech giant’s products. To make matters worse, investment firm Needham Securities said Apple is a laggard in artificial intelligence compared to Amazon (AMZN), Alphabet (GOOG) (GOOGL) and Microsoft (MSFT).
The tech giant, however, is excelling at what it does, nailing marketing and showcasing new products despite concerns about slowing or waning interest, Uerkwitz said. It’s “well ahead” of other brands and products, explains Uerkwitz, who has a buy rating and $220 price target on Apple (AAPL).
“At this late stage in the broader hardware market (mobile, tablet, PC) with incremental changes with a focus on what matters: build quality, ease of use and camera, Apple is doing what it needs to do,” Uerkwitz added.
Morgan Stanley analyst Erik Woodring, who has an overweight rating and a $215 price target on Apple (AAPL), said the event has historically been a sell-the-news event for the stock, but expectations for next years for the iconic device. too low.
“Despite concerns about a muted iPhone 15 cycle, we are confident iPhone RPMs will rise [year-over-year in fiscal 2024] given a growing installed base, simple [year-over-year] Comps, pent-up demand and positive mix shifts are driving ASP growth,” Woodring wrote in an investor note.
Woodring added that he expects iPhone revenue to rise 8% year-over-year to $218 billion in fiscal 2024, well above the consensus estimate, despite shipments expected to remain flat year-over-year .
Some on Wall Street expect the iPhone 15 Pro and Pro Max to see a price increase over the iPhone 14 Pro, perhaps as much as $100.
The tech giant is widely expected to unveil four versions of the iPhone 15: the iPhone 15, iPhone Plus, iPhone 15 Pro and iPhone 15 Pro Max, the latter two of which will have a titanium body. The biggest change will be that all four models will now use USB-C charging ports, the result of legislation passed in Europe last year that the continent says will reduce costs and electronic waste.
The two base models are also expected to receive Dynamic Island, an interface that was exclusive to the iPhone 14 Pro and Pro Max and allows users to see alerts at the top of the screen.
Other improvements include updated chips for all four phones (with the more expensive models having a performance advantage), improved cameras, new colors and cases.
In addition to the iPhone, Apple (AAPL) is expected to show off updates to its Apple Watch and AirPods product lines, while the AirPods Pro is also expected to switch to a USB-C charging method.
New features expected to be announced include automatic device switching, the ability to turn the headphones on and off yourself, and a feature known as Conversation Awareness that will automatically mute media when someone talks to the headset wearer, Bloomberg reported.
The Apple Watch is also expected to get updates, while the Series 9 and Ultra will get refreshes. Updates include new chips and updated performance, along with new materials and colors.
Cupertino, California-based Apple (AAPL) is also likely to discuss the latest versions of its operating systems in more detail after unveiling them at its annual developer conference in June.