Apple Bullish about iPhone’s Next Release: iPhone 6S
Apple Likely to Phone In Another Winner with 3Q15 Earnings
Apple confident about the success of its upcoming iPhone 6S and iPhone 6S Plus
Apple (AAPL) releases a new version of its iPhone every year in September. The iPhone 6S and iPhone 6S Plus should also be released in September this year. Usually, the “S” release has minimal hardware updates but some major software updates.
According to a report from the Wall Street Journal, citing people familiar with the matter, Apple has asked its suppliers to produce 85 million to 90 million new iPhones by the end of this year. In comparison, Apple ordered 70 million to 80 million iPhone 6 and iPhone 6 Plus units last year. This shows that Apple is bullish about its new releases, despite the phones having only incremental feature updates.
Apple’s confidence makes sense considering that consumers appear to be moving toward bigger smartphones or phablets. Consumers find bigger screens more engaging and vivid for viewing photos and videos. Plus, carrying a larger smartphone means you don’t need to carry both a smartphone and a tablet.
Smartphones with screen sizes of between 5 and 6.9 inches are popularly known as phablets. The iPhone Plus is a 5.5-inch smartphone, so it clearly lies in the phablet category. And the iPhone 6’s 4.7-inch screen puts it close to the phablet market range as well.
Phablet market is expected to grow at a fast rate
According to a report from Business Insider Intelligence, phablets are the fastest-growing smartphone segment. The report predicts that global phablet shipments could grow at a CAGR (compound average growth rate) of 27% until 2019. In contrast, the overall smartphone market is expected to grow at a CAGR of only 15%, as the chart above shows.
To leverage this trend, Microsoft (MSFT) launched the Lumia 640 XL phablet with a 5.7-inch screen a few months ago. This smartphone has some attractive features, such as a Qualcomm (QCOM) Snapdragon 400 SoC (system on a chip) with a 1.2 GHz quad-core processor. The smartphone also possesses 1 GB RAM and 8 GB internal storage.
Sony (SNE) has also launched a number of phablets, including the Sony Xperia T2 Ultra and the Sony Xperia Z Ultra.
For diversified exposure to Apple, you could invest in the iShares U.S. Technology ETF (IYW). IYW invests about 21% of its holdings in Apple.
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