With Apple's mixed-reality headset reveal in the rearview mirror, investor attention is shifting to the next potential catalyst for Apple stock — the introduction of the iPhone 15.
Apple hinted at the capabilities of the new smartphone with a demonstration Monday of the next iPhone operating system, iOS 17. The company detailed the features of iOS 17 in a keynote presentation to kick off its Worldwide Developers Conference.
However, the unveiling of Apple's Vision Pro computer goggles overshadowed the iOS 17 news on Monday.
Now in beta testing, iOS 17 will be available this fall as a free software update for newer model iPhones, starting with the iPhone X. It also will come preinstalled on the iPhone 15, which likely will launch in September.
Apple Stock Gets Price-Target Hike
On Wednesday, Wedbush Securities analyst Daniel Ives raised his price target on Apple stock to 220 from 205, citing bright sales prospects for the iPhone 15. He rates Apple stock as outperform, or buy.
Ives expects iPhone 15 sales to exceed expectations with more buyers choosing higher-end models.
"We estimate roughly 250 million iPhones have not been upgraded in over 4 years and (that) sets Apple up for a major installed base upgrade cycle," Ives said in a note to clients.
Plus, with more customers buying Pro models, Apple should see a nice boost in average selling prices, he said.
Average selling prices could approach $925 for the iPhone 15, which would be up about $100 in the last 18 months, Ives said.
Services Growth Is Another Tailwind
And more iPhones sold will lead to more high-margin services sales, Ives said.
Apple is on pace to approach $100 billion in annual services revenue in fiscal 2024. That compares with services revenue of about $50 billion in fiscal 2020, he said.
At its WWDC show, Apple also previewed new features coming to Apple services this fall. Services getting major enhancements include Apple Music, Podcasts, News, Fitness and Maps.
Many of the service upgrades are designed for iOS 17 and the iPhone. The new operating system includes the ability to leave FaceTime video messages and receive live transcriptions for incoming voicemail messages.
Plus, iOS 17 will bring personalized Contact Posters. Users can add full-screen portraits with eye-catching typography and font colors, which will appear on incoming calls.
Apple stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
