The past week or so has seen many rumours flying around about Apple, or, more specifically, about the new “iPhone 8”. Commentators still don’t know if that will be the name of the much-anticipated new Apple phone, set to be launched in the autumn, but that hasn’t stopped investors making speculations.

Apple’s share price has been breaking records over the past week, with the stock currently trading at an all-time high. Yesterday saw the stock touching $136.74 and it doesn’t show any sign of slowing down – Apple’s market capitalisation has flown past $700 billion for the first time since 2015.

But why is the share price soaring? Many investors are excited at what the new iPhone 8 may offer consumers. It’s rumoured to have an edge-to-edge OLED display, wireless charging and a new high-tech alternative to the physical home button. This is a complete overhaul of the current iPhone’s design. However, this new phone will almost certainly cost more than $1,000.

Does this mean that the launch will not be as great as many are predicting? Many are arguing that this is not so. Customers have not seemed to have minded in the past that the price of their iPhone has increased time after time – in Apple’s most recent quarter, the iPhone’s average selling price hit an all-time high of $695. Also, Apple CEO Tim Cook has reported that the number of iPhone upgraders and buyers switching from other smartphones were also at an all-time high. It certainly seems that business is booming.

However, there are some dissenters. Barclays analyst Mark Moskowitz downgraded Apple’s stock in late January, citing concerns with the China market as well as the trend that’s seeing customers increasingly choose older devices instead of newer ones.

He’s not alone: this week saw Deutsche Bank’s Sherri Scribner maintaining a “hold” rating on the stock, cautioning that expectations may be climbing too high. “We caution that it might outsell its predecessors only marginally, due to the high price”, she stated. “We remain more cautious, given slowing global smartphone growth, elongating refresh cycles and the expected high price of new models.”

What’s your opinion? Do you think their new phone will be Apple’s new big thing, or do you take a more cautionary approach?


The views and content expressed above are the views of the author and do not reflect the views of ayondo markets. This service is for information only and should not be interpreted as investment advice or any recommendation to enter into a financial transaction.

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