Low Expectations For iPhone 7 Extends Apple Inc. (AAPL) Buying Opportunity


Apple Inc.  is expected to unveil the long-awaited iPhone 7 next week. The company has sent out invitations for its iPhone launch event in San Francisco on September 7. Investors are concerned about the declining iPhone sales, and the Wall Street is excited to see what changes the company has made in the newest models.

A report published in Motley Fool suggests that investor expectations are low for the iPhone 7. In a note to investors, Piper Jaffray analyst Gene Munster pointed out that low expectations, however, presents a buying opportunity, Apple Insider reported.

Apple Inc (AAPL) iPhone

There’s Upside Potential For Apple Stock

Apple reported its financial results for the third quarter of fiscal year 2016 on July 26. The company sold 40.4 million iPhone units in the third quarter, down from 47.5 million units sold in the same period last year. The iPhone revenue in the third quarter decreased 23.6% year over year.

This is why investor expectations for the iPhone 7 are low. The reports suggested that the iPhone 7 will be similar to the iPhone 6s, featuring a dual-camera system and a re-designed pressure-sensitive home button

Munster believes that low expectations means there’s upside potential for the stock if the refreshed iPhone 7 attracts more users than expected. He believes that “any unexpected announcements or features could help propel shares of AAPL higher.”

“Not only may there be upside potential for Apple stock if iPhone 7 attracts more buyers than expected, but this potential upside could be substantial,” the Motley Fool article reads.

iPhone 8: Next Opportunity

Apple Inc.  is expected to release the iPhone 8 next year to celebrate 10th anniversary of its iPhone. There has been a lot of speculation surrounding this landmark mobile device. A lot of people have high hopes for the iPhone 8. One of the ideas being floated around is that it could have augmented reality and virtual reality features.

“If Apple can simply maintain current levels of iPhone sales but scores a big with its 10-year anniversary iPhone next year, which is expected to include a significant overhaul, Apple would essentially get another chance at making the stock’s current valuation look borderline silly,” the article reads.

Some analysts fear that customers will skip the iPhone 7 and wait for the iPhone 8. It has been speculated that the iPhone maker will give the iPhone 8 a makeover, and the device may come with virtual and augmented reality technology. Reports also say that the model could be equipped with an OLED screen, long-range wireless charging and even an all-glass body.

Warren Buffett Also Sees Value in Apple

As we reported earlier, Warren Buffett is betting big on Apple, in which the investor boosted its stake in the company by around 56% during the second quarter. The latest 13F filing shows that Buffett’s Berkshire Hathaway was holding 15.23 million shares, worth $1.46 billion, at the end of June.

Another investor, Citadel Investment Group, also seems a value in the iPhone maker, upping its position by about 70% during the last quarter.

During the past six months, shares of Apple Inc.  have surged more than 10%. The stock, however, has dropped by 5.71% during the past 12 months.

Disclaimer: The above should not be considered or construed as individualized or specific investment advice. Do your own research and consult a professional, if necessary, before making investment decisions.

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