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Although the possibility of further declines is always risky, the recent crash has provided value-oriented investors with an excellent opportunity to start building positions in top companies.
Apple Inc. (NASDAQ: AAPL) is one of the top technology stocks investors should pay close attention to during the COVID-19-driven crash. The emergence of the fifth generation (5G) wireless network and the rapidly growing service business are riders. Although inventory has fallen a lot, they can still ensure long-term growth for iPhone makers. The good news is that investors now have reason to choose Apple stock in this crash.
Apple's new plan
Apple's supply chain has been rumored to suggest that the company may launch entry-level phones for quite some time. This 4.7-inch device will be based on the iPhone 8 case and may be named iPhone 9, but 9to5Mac now reports that the "plus" version may also be under development.
The technical publication references the iOS 14 code snippet and reports that Apple may be working on a larger version of the entry-level device. This suggestion doesn't seem strange, as the iPhone 8 also offers two screen sizes, 4.7 inches and 5.5 inches. 9to5Mac also revealed that both devices can be powered by the A13 bionic processor that currently powers the iPhone 11.
This shows that Apple follows a similar strategy to when the iPhone SE was launched in March 2016. iPhoneSE sells for $ 399, which is essentially the smaller iPhone 6S. Apple has provided the expensive iPhone 6S with almost all the advantages of its cheap phone, and the iPhone 6S was launched a few months before the launch of the SE.
But the "plus" version released this time suggests that Apple may adopt a two-tier pricing strategy on its most affordable phones. Such strategies may make sense in emerging markets and developed countries.
Why this might be a genius idea
Apple's new compact device may be a good upgrade for users of older models (such as iPhone 6S, iPhone 6S Plus and previous models). According to consumer intelligence research partners (CIRP), by the end of 2018, these models accounted for 41% of Apple's installed users in the United States, or 75 million.
iPhone 8, iPhone 8 Plus, iPhone X, and 2018 models XS and XS Max accounted for 25% of installed users in the United States at the time. Currently, CIRP has not broken down the installation base of the iPhone generation in the latest report released last November. But based on the latest available data, it's clear that many users can still use older iPhones with screen sizes less than 6 inches (the iPhone XS has a screen size of 5.8 inches).
Therefore, a competitively priced 5.5-inch entry-level iPhone may encourage these users to upgrade this year. Third-party reports show that the price of the 4.7-inch entry-level iPhone is expected to start at $ 399. That's why Apple may start pricing any 5.5-inch model at a higher price (for example, $ 500). Close to the average price of $ 528 for US smartphones.
In this way, Apple can attract mid-range smartphone users and expand its market share by using cheap 5.5-inch devices in developed markets. At the same time, cheaper 4.7-inch models can come in handy in emerging markets such as India, where smartphones priced between $ 300 and $ 500 are rapidly growing in India.
Therefore, if Apple actually launches two budget-friendly iPhones this year, it could bring huge benefits to itself, which provides investors with a solid reason to buy more potential growth stocks, although it has been severely hit recently.
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News Reference: https://www.nasdaq.com/articles/one-more-reason-to-buy-apple-stock-right-now-now-2020-03-21
