The stock market has been unpredictable, and August has been no exception. According to Dow Jones Market Data, the Nasdaq Composite experienced a 5.3% decline this month, putting it on track for its worst performance of the year. This downward trend has also affected Apple (AAPL) stock, which has seen a significant drop of 9.1%, marking its first monthly decline in 2023.
As of now, Apple is lagging behind the Nasdaq Composite by 3.8 percentage points. If this trend continues, it will be the largest underperformance for Apple since November 2022.
The decline in Apple’s stock can be attributed to the news in early August that the company’s sales dropped by 1% compared to the same quarter last year. Particularly concerning was the decrease in iPhone sales, which is Apple’s primary revenue generator. During a call with analysts and investors to discuss the results, Apple’s management acknowledged a decline in the US smartphone market over the past few quarters.
Despite these challenges, there is hope on the horizon for Apple. The anticipation is building for the upcoming launch of the iPhone 15, which is set to take place next month. This release could potentially boost Apple’s stock and allow it to regain its footing in the market.
Only time will tell how Apple’s stock will fare in the coming months. Investors and analysts are eager to see if the introduction of the iPhone 15 will bring about a turnaround for the tech giant.
Smartphone Shipments Decline in Q2
According to market research firm International Data Corporation, global smartphone shipments experienced a 6.8% decline in the second quarter compared to the previous year. This marks the eighth consecutive quarter of contraction for the smartphone market. The decline is attributed to various factors such as soft demand, inflation, macroeconomic uncertainties, and excess inventory.
Anticipation for iPhone 15 Release
There is, however, optimism on the horizon. Apple is expected to unveil its newest iPhone, the iPhone 15, in September. Previous reports have indicated that Apple stock typically sees an increase in the months following a phone launch. It is anticipated that this trend could continue once the iPhone 15 hits the market.
Potential Design and Feature Updates
According to a research note from Evercore ISI analyst Amit Daryanani on August 18, the iPhone 15 is projected to introduce significant design and feature updates. Daryanani believes that these changes will not only incentivize customers to upgrade their devices but also contribute to a higher average selling price (ASP). This increase in ASP will likely be due to both higher pricing and consumers being convinced to choose the more advanced Pro models over the base models. Daryanani rates Apple stock as Outperform with a price target of $210.
Price Increase and Potential Upgrades
Wedbush analyst Dan Ives also shares a positive outlook. In his analysis dated August 15, Ives suggests that the iPhone 15 Pro/Pro Max version may see a price increase of $100-$150. However, this increase is expected to be manageable for many upgrade customers due to significant carrier promotions. Ives estimates that around 240 million iPhones worldwide have not been upgraded in over four years, presenting a substantial potential market. Ives rates Apple stock as Outperform with a price target of $230.