Analyst Note| Abhinav Davuluri, CFA |
On Oct. 13, Apple 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.