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Apple Inc AAPL

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Incremental iPhone 13 Likely to Drive Incremental Revenue Growth in 2022 For Apple; No Change to FVE

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

On Sept. 14, Apple held its annual product showcase, where the firm announced the launch of a new iPhone, iPad, and Apple Watch. Similar to last year, Apple launched four new iPhone models: the iPhone 13 ($799), iPhone 13 mini ($699), iPhone 13 Pro ($999), and iPhone 13 Pro Max ($1,099), with pricing consistent with equivalent models from the prior year. Beyond the typical chip, battery, and camera enhancements, we equate many of the updates to those of past iPhone “S” models that were more incremental in nature. While 5G penetration remains in the early innings, we think Apple’s fiscal 2022 iPhone growth is likely to be more muted than the growth implied by the current stock price. We are maintaining our $124 fair value estimate for narrow-moat Apple.

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Company Profile

Business Description

Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), AirPods, and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Card, and Apple Pay, among others. Apple's products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple's products are distributed online as well as through company-owned stores and third-party retailers. The company generates roughly 40% of its revenue from the Americas, with the remainder earned internationally.

One Apple Park Way
Cupertino, CA, 95014
T +1 408 996-1010
Sector Technology
Industry Consumer Electronics
Most Recent Earnings Jun 30, 2021
Fiscal Year End Sep 30, 2021
Stock Type Cyclical
Employees 147,000