With the much-awaited announcement of the next-generation iPhone tomorrow, Apple is expected to bring the “biggest launch” in the consumer electronics history. However, a bevy of leaked parts and information previously posted indicate that there won’t be any big surprises in the event.
The Blockbuster Next-generation iPhone Event
Topeka Capital Market’s Brian White said in a note to investors last Monday that Apple’s so-called “iPhone 5” will be the biggest upgrade in the industry’s history. He believes that the company could sell between 10 million and 12 million units of the upcoming handset within its current fiscal quarter.
In addition, Deutsche Bank’s Chris Whitmore expects that the new mobile phone will represent the most significant upgrade from the company to date. The device is expected to feature 4-inch display, 4G LTE radio, and a redesigned form factor.
We expect this feature set to drive a massive refresh cycle which should be reflected in Apple’s valuation over time. In short, we’d use any weakness in AAPL around the iPhone 5 event as a buying opportunity.
Lack of Surprise = Weak Company Stock
On the other hand, a weakness in Apple’s stocks this week may come from lack of surprises before it unveils the next-generation iPhone. Whitmore pointed out that with all the leaked information leading to tomorrow’s event, it “appears unlikely that Apple will positively surprise on iPhone 5’s feature set.”
With the production of the upcoming handset believed to be ramping up, a significant number of leaks have shown what the device could look like. This includes the new smartphone’s 4-inch screen, 9-pin dock connector, and two-toned metal back panel.
There are even photographs that show a detailed side-by-side comparison of the expected mobile phone and its iPhone 4S predecessor. The images show that the next-generation iPhone will be thinner that the current model.
Impact of iPhone Announcements to Apple
In relation to this, a research conducted by Deutsche Bank revealed that iPhone announcements have small impact on Apple’s share price. On average, stocks are up 1 percent a day after the announcement, 1 percent after five trading days, and it will decrease to 2 percent after a month.
However, the company’s share price would increase an average of 3 percent three months after an iPhone announcement. It will also skyrocket up to 24 percent six months following the launch of a new iPhone.
But whether it will come with big surprises or not, people will definitely be in a long queue once the next-generation iPhone hits the stores.