Apple Stock: iPhone 14 faces budget-conscious consumers

Appleit is (AAPL) fall product announcements, including the iPhone 14 family, drew positive reviews from Wall Street analysts. But Apple stock fell on Thursday as some wonder if consumers will be in the mood to buy.


At a media event on Wednesday, Apple showed off its iPhone 14 series handsets, Apple Watch Series 8 smartwatches and second-generation AirPods Pro wireless headphones.

“With household bills all going in the wrong direction, this still represents a real test of consumers’ appetite for these latest shiny devices,” PP Foresight analyst Paolo Pescatore said in a note to clients. Sales of the new gadgets will be a test of “the Apple brand in a difficult economic climate where everyone is tightening their belts”.

The rough macro outlook likely explains why Apple has kept iPhone 14 series prices consistent with last year’s models in the U.S. market, Piper Sandler analyst Harsh Kumar said in a note to clients.

“Given the constrained economic environment, we believe this is an added advantage for Apple,” he said. Kumar sees Apple stocks as overweight or buying.

The entry-level iPhone 14 starts at $799 while the Pro models start at $999.

Apple stock falls

After the event, Apple stock rose 0.9% to close at 155.96 on Wednesday. However, in the stock market today, Apple stock fell 1% to 154.46.

Apple Watch Series 8 wearables will be harder to sell than new iPhones in the current climate, Rosenblatt Securities analyst Barton Crockett said in a note.

The Apple Watch is more of a discretionary purchase, he said. Crockett noted that Apple Watch sales were weak in the June quarter amid high inflation and macroeconomic uncertainty. He sees Apple stock as neutral.

Apple Watch Series 8 devices start at $399. A new top-of-the-line Ultra model for outdoor enthusiasts and adventurers is $799.

Satellite feature to spawn imitators

iPhone 14 smartphones have satellite connectivity for emergencies in remote areas beyond cellular networks.

Satellite linking is a new feature at the moment, but competitors are expected to follow suit soon, GlobalData analyst Anisha Bhatia said in a note. Apple’s Emergency SOS service will use the Globalstar (GSAT) satellite network, starting in November.

Rivals work with satellite operators Iridium Communications (IRDM) and SpaceX, according to analysts.

iPhone 14 Pro models have an always-on display with a new activity alert feature. They also sport an improved camera with 48-megapixel resolution, three times optical zoom and better low-light imaging. Additionally, the Pro models get a faster processor, the new A16 chip, than the regular models.

The iPhone 14 handsets use eSim technology so people can easily connect or quickly transfer their existing plans digitally instead of using a physical SIM card.

Apple stock has an IBD composite rating of 88, according to IBD Stock Check. The best growth stocks have a composite rating of 90 or higher, according to IBD trading guidelines.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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