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Markets Shaky Over Late iPhone X Date

By Patrick Higgins  |  13/09/2017 14:50

Apple's chosen release date for its newest product has caused global stock markets to tumble, just as many had recovered from the most recent warlike rhetoric to spew out of North Korea. 
 
Kim Jong-Un, in one of his most colourful announcements to date, vowed to double his country's effort to sustain a robust nuclear programme and threatened to inflict on the US, "the greatest pain it ever experienced," if America continued to put sanctions on Pyongyang.
 
Apple announced yesterday during its keynote presentation in Cupertino, California that its technologically revolutionary iPhone, the iPhone X, would be shipped and available for purchase starting November 3rd with pre-ordering possible from October 27th, a much later time frame than investors had anticipated.  The push backed release date has prompted supply constraint concerns, as the November release date is uncomfortably close to the start of the holiday period.
 
Apple suppliers, such as optical sensor maker AMS and semiconductor producer IQE Plc, saw oscillations of minus 1-3% and minus 6% respectively this morning during opening European trade.  Apple itself saw a -0.4% close yesterday on Wall Street, with a further fall of -0.4% in pre-market trades this morning.  Despite the slight shock from Apple's announced release date, these drops seem to be of minor importance.  Amongst Europe's high tech stocks this year, chipmakers and sensor producers have been the best performing.  For example, AMS has seen its stock appreciate +165% in the last year.
 
The X, Apple's 10-year anniversary celebratory product, has a glass back for wireless charging through Apple's upcoming second generation AirPod stations.  It also has Face ID, augmented reality with a new feature called, "Animoji" where you can control the emoji's and their facial expressions, an infrared camera, OLED graphics implementation which improves the brightness and image quality, and a curved screen.
 
In addition to the X, the new iPhone 8 (the direct descendant of the iPhone 7) and the new Apple Watch Series 3 were also unveiled.  The Series 3 is now able to make calls, surf the internet, and download apps.  What is most extraordinary is that this is now all possible without connection to an iPhone, an improvement that likely will cause sales of Apple's watch line to increase.  The 8, though more similar to the iPhone 7, has a glass black for portable charging, like the X.  Both the X and the 8 have HD retina displays, which come in sizes 4.7-inch and 5.2-inch.  Most excitingly, all of the advances seen in Apple's upcoming products are made possible by the implementation of a brand-new CPU chip, called the A11 Bionic.  This chip implements four efficiency cores, which are 70% faster than the previous generation chip, and two performance cores.
 
The pricing of the iPhone X, at around $1,000, is fascinating in that it will be a great indicator of global consumer confidence, and whether US firms still have the pricing power that they once did unquestionably.  Apple, being at the forefront of technological innovation, is undoubtedly an exception, but this is the first time that the starting price of an iPhone model will begin at a minimum of $1,000.  Whether demand for the iPhone X will be high or not can be tied down to two possible factors.  One, the rate of inflation in developed economies during the November release period, and two, the strength of Apple brand loyalty and consumer certainty that purchasing a $1,000 cell phone is a smart decision. People will buy the X, but to say that the price is completely worth it due to the technological advancements is to overestimate.  The final call will be left entirely up to the individual consumer.
 
 

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