The $999 iPhone X (pronounced 'Ten') represents a major step up for Apple -- not only in price, but in features, too, in that it packs an edge-to-edge organic LED screen, facial recognition technology, wireless charging and various AR capabilities. The iPhone X will ship Nov. 3, which is later than some analysts were expecting, and might mean that the lift to Apple's sales won't come until after the December quarter. Apple also released the iPhone 8 and 8 Plus, a new Apple Watch Series 3 and a 4K Apple TV.
Shares of Apple were sliding 0.6% to $159.75 on Wednesday morning, as analysts continued to weigh the impact of the later-than-expected iPhone X ship date.
By and large, Wall Street seemed to be pleased with Apple's announcements on Tuesday, albeit noting that many were leaked in the media ahead of time. Here's what they had to say about the iPhone X and other Apple news:
Michael Olson, Piper Jaffray (Overweight, $190 Price Target)
"AAPL is well positioned as the iPhone X captures investor attention. Apple has indicated that, despite reporting favorable iPhone units in the most recent quarter, iPhone was negatively impacted by awareness of upcoming devices. While we are less certain of awareness of new iPhones, this commentary suggests this cycle will see a higher upgrade rate than previous iPhones, except perhaps iPhone 6. Also, while there has been concern around 'sell-the-news' potentially impacting AAPL following the launch, we would note that the stock has, on average, outperformed following iPhone launches in the past 4 years (noting that past performance is no indication of future results)."
Brian White, Drexel Hamilton (Buy, $208 PT)
"The 5.8-inch iPhone X catapults Apple into the ultra-luxury smartphone market with the highest priced iPhone in the company's history, which includes a new 5.8-inch Super Retina Display (OLED), removal of the home button and TrueDepth camera with support for Face ID (unlocking iPhone and using Apple Pay with Face). We are even more encouraged by Apple's September quarter outlook...given that this speaks to the company's expectation for the iPhone 8/8 Plus, rather than the iPhone X."
Andy Hargreaves, KeyBanc Capital Markets (Sector Weight)
"We viewed the iPhone X launch event as largely neutral. We were positively surprised by the Apple Watch functionality and the price increase on the iPhone 8 and 8 Plus, but were disappointed by the lack of incremental functionality in the iPhone X to justify the $999 price point. We believe this raises the risk that future cycles will see trade-down behavior and correlated pricing pressure."
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Tim Long, BMO Capital Markets (Outperform $180 PT)
"We attended the iPhone launch in Cupertino, CA, where Apple unveiled new Watch and Apple TV models. There were few surprises, though we did like the new phone's design and the pricing adjustments. While we were disappointed by the later-than-expected ship date for the iPhone X (pronounced "ten"), we still believe the refreshed iPhone portfolio will do well thanks to improved features and a growing installed base."
Vijay Jayant, Evercore ISI (No rating)
"We view the newly announced iPhone 8/8+ and iPhone X as incremental improvements, but not transformative devices. While the iPhone X is clearly a significant step forward in capabilities, we believe that the very high price point ($999, or more than $40/month on a 24 month installment plan) could slow uptake, at least initially. Given the large base of iPhone 6 and 6S devices in the marketplace, though, we continue to expect this to be a larger upgrade cycle than 2016."
Steven Milunovich, UBS (Buy, $180 PT)
"Despite few surprises following leaks, the product event was nonetheless impressive. We have two primary takeaways. Regarding F18, iPhone pricing was a bit higher than we expected; the company is pushing the envelope likely in the belief that its innovation warrants higher prices. Our earnings per share estimate of $11.15 does not change at an iPhone average selling price of $724 on an iPhone X contribution of 35%. Longer term Apple made a positive statement regarding future capabilities, including AR potential, a better charging experience, and more control over its technology."