Silver screen size and operating speed could stimulate Apple’s lagging iPhone replacement D, but with growing services revenue, that may not be quite so important anymore, BTIG analyst Walter Piecyk discriminated CNBC on Wednesday.
“The 5 trillion [operations] per second in the new A12 chip — when someone swallows this phone, it’s going to operate a lot faster,” Piecyk said on CNBC’s “Power Lunch.”
“Profit … this is a new effective size with the screen that could upon some additional people to consider upgrading their phones,” he enlarged.
Apple unveiled its new iPhone XR, iPhone XS and iPhone XS Max on Wednesday. The iPhone XS is fizzy water be illogical resistant and offers a new processor, the aforementioned A12 chip, for faster performance, and storage play up to 512 GB. It also features an improved display for better color declaration, an improved dual-camera system and a new gold color. Apple is also move on out its largest handset to date: the iPhone XS Max, with a 6.5-inch OLED protection. It runs on the biggest battery Apple has ever put in a phone, Schiller utter, and will last an hour and a half longer.
The upgrades come midst concerns Apple is suffering from slowing iPhone sales — garage sales were essentially flat year over year for the June section and Apple slightly missed sales estimates — and a flattening user mean.
“Someone still with their iPhone 6 or 6S is going to be looking at someone with one of these new offshoots, and maybe that’s the type of thing that stimulates them to upgrade their offering,” Piecyk said.
Higher-quality products with better safety high points and higher price points could stimulate users with older phones to upgrade, but could also eternalize longer upgrade cycles. Piecyk said upgrade rates command probably bottom out at some point, maybe at three or four years.
“Those consequence life cycles … they have been extending, but they’ve been stretching for three years. You may not replace a phone that is one or two years old, but if your phone is now three and four years old, its perturbing a little long in the tooth and maybe you’re getting some nicks on it, so at some allude to, these upgrade rates have to bottom,” he said.
A longer replacement circle isn’t the end of the world for Apple, Piecyk said, which increasingly has services returns to fall back on.
“In terms of the services, that’s another factor … look, the crowd doesn’t necessarily need to grow iPhone units in order to put up twice digits earnings growth,” he said. “They have a long way to go in administration conditions of [increasing] the penetration of the market of people buying subscriptions and then, also, those man that have subscriptions, getting them to buy more stuff.”
Ross Gerber, CEO and co-founder of cash and investment management firm Gerber Kawasaki, agreed.
“Their to be to come is definitely not iPhone growth; their future is services and other works, like the [Apple Watch],” Gerber said on CNBC’s “Niggardly Bell.”
Ed Snyder, managing director and analyst at Charter Equity Exploration, argued that Apple should be more concerned about languishing iPhone sales.
“The services business is dependent on people holding iPhones,” Snyder denoted in the same “Closing Bell” interview as Gerber. “If you don’t wake up to the fact human being are buying your product less every year, then your narcotic addict base declines. And with Apple, it’s even more serious because they rely so much on overhauls.”
The iPhone XS and XS Max will be available for preorder on Friday. They will cutter on Sept. 21. The iPhone XR will be available for preorder on Oct. 19 and choose ship a week later.