Apple s (NASDAQ: AAPL) 2018 The iPhone series will go down as one of the more turbulent product cycles in the company's history. Based on Apple's revised guide, iPhone sales fell by 15% to about $ 52.2 billion in December, representing the worst growth this year. The Mac manufacturer experienced several rough quarters of iPhone revenues declining back in 2016, and while price increases increased revenue growth in 2017 and most of 2018. iPhone XR does not appear to sell well, although management continues to defend sales of units off that model.
What does Apple have in the store for this year?
What to Expect in the 2019 Series
Wall Street Journal (subscription required) reports that Apple has another trio of iPhones slated for this fall, including an LCD model to succeed in the afflicted iPhone XR . Despite XR's apparent struggle, Apple is keeping an LCD display, because changing the design at this time would be a challenge. Also, the LCD screen, which is much cheaper than OLED panels, is unlikely to cause poor sales. However, Apple wants to switch completely to OLED monitors in its 2020 series, the report said.
Apparently, other recent leaks confirm the flagship model is expected to drive a triple rear camera. The other two models, including the LCD model, will have a dual rear camera. The iPhone XR currently has a single rear camera. Rivals have added a growing number of cameras and pushed Apple to do the same. Journal's sources say Apple has investigated the camera features found on these models, especially the handset of Chinese manufacturers who have eaten in their market share in the Middle Kingdom.
Apple is also thinking of removing some features, such as 3D Touch – which was not included in the XR – in an attempt to reduce costs. What is less clear is that if Apple were to use cost savings to cut its margins or pass on consumers to lower prices.
Separate Barclays also launched a research note today that outlined expectations that the next iPhone will support the latest Wi-Fi standards, as well as an enhanced TrueDepth camera system for improved Face ID performance.
But how much will they cost?
Pricing will be as important as what has 2019 iPhones. Apple has now admitted that upgrading activity is slowing down, even in emerging markets, and it is painfully clear that high prices combined with ever-increasing functional ratings are a recipe for poor sales. The challenge of returning pricing would be how to effectively justify it to consumers, by consistently defending price increases.
Although still very profitable, the iPhone's most robust growth days could be over. But with Apple stocks trading below 13 times revenue right now, it's not as if the market is pricing in growth expectations.
Evan Niu, CFA owns shares in Apple. Motley Fool owns and recommends Apple shares. Motley Fool has the following options: long January 2020 $ 150 calls on Apple and short January 2020 $ 155 appeals to Apple. Motley Fool has an information policy.