Skip to Content
Stock Analyst Update

Apple Launches 5G iPhone As Expected; No Change to FVE

We believe shares are overvalued for this narrow-moat tech company.

Mentioned:

On Oct. 13, Apple (AAPL) held its annual product showcase, where the firm announced the launch of four new iPhone models: the iPhone 12, iPhone 12 mini, iPhone 12 Pro, and iPhone 12 Pro Max. All devices in the “12” family are 5G-compatible. The base iPhone 12 model was priced at $799, which is $100 more expensive than the equivalent iPhone 11 launched in 2019, which we attribute to the costly 5G modem and RF content. Taking the $699 slot is the smaller iPhone 12 mini with a 5.4” screen. While we suspect the 5G capability and updated cameras (the Pro variant boasts a LIDAR scanner to autofocus in low-light) will be major draws for many customers, we think market expectations for iPhone sales in the coming quarters may be too aggressive. We are maintaining our $71 fair value estimate for narrow-moat Apple, and we view shares as overvalued at current levels.

Battery life continued to expand, thanks to the new A14 Bionic chip, which is manufactured on TSMC’s 5-nanometer process technology that leverages EUV lithography. For the A14, Apple claims a 50% performance advantage over any other competing mobile chip, though we were surprised by a lack of color on power efficiency. For 5G, the firm claimed up to 4Gbps download and 200Mbps upload speeds in ideal conditions. We doubt most users will experience these speeds anytime soon, as the 5G ramp is still in the early innings.

The iPhone 12 Pro and 12 Pro Max will start at $999 and $1,099, respectively, in line with the starting prices of their equivalents from 2019. The Pro models both feature larger screens than their predecessors, with the Pro and Pro Max going from 5.8” and 6.1” to 6.5” and 6.7”, respectively. The Pro has three cameras (ultra-wide, wide, and telephoto), with the Pro Max having even better cameras. The emphasis on camera features is consistent with other Android-based smartphone vendors that have been also adding additional cameras and claiming superiority to Apple devices in the picture quality department.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Abhinav Davuluri does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.