Apple's iPhone 15 debut might have been a yawner for investors but it provided enough updates to the company's smartphone lineup to spark upgrades, analysts said. Apple stock dropped on Wednesday.
The iPhone 15 lineup features modest tech advancements over the current iPhone 14 family. Like last year's lineup, the iPhone 15 comes in four versions: two basic models and two premium models.
The high-end iPhone 15 Pro and Pro Max handsets got the most improvements. They include the latest processor, the A17, which is made at 3-nanometer scale by Taiwan Semiconductor Manufacturing.
The Pro models also get a sleek new design with a titanium frame and a customizable "action button." The action button takes the place of the ring-silent switch and can be configured to activate the camera, voice memos and other apps.
IPhone 15 Handsets Due Out Next Week
The new smartphones will be available on Sept. 22 with preorders starting Friday.
The basic models — iPhone 15 and iPhone 15 Plus — start at $799 and $899, respectively, matching their predecessors. The iPhone 15 Pro starts at $999, the same as last year's comparable model.
However, the top-of-the-line iPhone 15 Pro Max gets a $100 price increase along with a boost in storage capacity. It starts at $1,199. The showcase feature of the iPhone 15 Pro Max is its 5-times optical zoom camera that uses a tetraprism lens.
Apple also announced the Apple Watch Series 9 smartwatches at the event Tuesday. Those wearables also will be available on Sept. 22.
"Overall, we view the event as mildly disappointing given bulls were looking for a price increase on the iPhone Pro model as well as blood pressure monitoring functionality for the Watch," Evercore ISI analyst Amit Daryanani said in a note to clients.
Daryanani reiterated his outperform rating on Apple stock with a price target of 210.
Apple Stock Pulls Back After Event
On the stock market today, Apple stock dropped 1.2% to close at 174.21. On Tuesday, Apple stock retreated 1.7% to close at 176.30.
"The meh stock reaction reflects a lack of wow in the feature set, and lack of meaningful price hike," Rosenblatt Securities analyst Barton Crockett said in a report on the iPhone 15 launch. He rates Apple stock as neutral.
"But we do expect unit demand to continue to skew to the pricier models, boosting revenue per unit, especially in the December quarter, when availability of Pro and Pro Max models in the year-ago (period) was severely constrained," Crockett said.
Good Enough Announcements
Gene Munster, managing partner with Deepwater Asset Management, said the announcements were good enough to satisfy the Apple faithful.
"While most of these updates were incremental, they're enough to attract the 400 million iPhone owners with phones more than 4 years old, which should return Apple to revenue growth in the December quarter," Munster said in a blog post.
Wedbush Securities analyst Daniel Ives said he was impressed by Apple's presentation.
"Apple's iPhone 15 launch event was overall an impressive event, which in our opinion lays the groundwork for a major upgrade cycle over the next year that will surprise the Street to the upside," Ives said in a note to clients.
Ives maintained his outperform rating on Apple stock and upped his price target to 240 from 230.
Apple Stock News: Semiconductor Advancements
JPMorgan analyst Samik Chatterjee said Apple's main innovations with its latest smartphones and watches were in the semiconductors running the devices.
A key take-away from Apple's presentation was a focus on "hardware differentiation through more aggressively innovating on the underlying silicon, and driving software features on improved chipset capabilities," he said in a report.
Chatterjee rates Apple stock as overweight with a price target of 230.
Morgan Stanley analyst Erik Woodring reiterated his overweight rating on Apple stock with a 215 price target. He liked Apple's advancements in on-device artificial intelligence on the iPhone and Apple Watch.
"On-device AI and machine learning featured heavily in today's event, making the case for AI at the edge," Woodring said in a note to clients Tuesday.
AI use cases demonstrated at the event included voice isolation on the iPhone for speakers in noisy environments and better image capture with the main camera. Apple also showed off more accurate voice dictation with the Siri voice assistant.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
