Polishing The Apple

Apple hosts its annual event to introduce the new iPhone

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What's going on?

Apple unveiled its shiny new iPhone at its annual launch event on Tuesday and investors werent sure what to make of it…

What does this mean?

This years iPhones are largely seen as a stop-gap until next years, when tech-loving texters expect to see performance-boosting 5G compatibility. But Apple still needs customers to cough up $1,000 in the meantime: iPhones are the companys biggest earner, making up nearly half its total revenue. They used to contribute a lot more, mind you: Apple shipped 30% fewer iPhones in the first quarter of 2019 than the same period a year before.

That might be why Apple is so focused on wearables and hearables sales of which are growing fast. And if it wants to avoid a repeat of its first profit warning in 15 years, the giant will need to nail its recurring revenue sources too including its forthcoming streaming and gaming services. Needless to say, it has some stiff competition.

Why should I care?

For markets: From tech to …tech?
Investors sent Apples stock up, down, and all around on Tuesday. Perhaps self-proclaimed tech firm WeWork had left them feeling non-committal, following reports on Tuesday that its biggest investor, SoftBank, wants it to shelve plans to go public. An initial public offering would reportedly value WeWork at just $20 billion a long way from its most recent private valuation of $47 billion. But without an injection of at least $3 billion which would allow WeWork to borrow twice that the notorious cash-burner may struggle.

The bigger picture: Nokias scary precedent.
Some analysts see something of Nokia in Apple. The once-ubiquitous Finnish tech firm pioneered the development of 2G not to mention Snake but became overly dependent on hardware. Tough competition from the new Apple on the block eventually led Nokia to sell its smartphone division to Microsoft which is now abandoning phones altogether. But Microsoft may have the last laugh: after a successful year for its subscription services, the software giant’s stock valuation has topped Apples.

Originally posted as part of the Finimize daily email.

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