Innovation Back at Apple (AAPL) Following Three-Year Pause - Global Equities
Global Equities Research issued initial commentary on Apple (Nasdaq: AAPL) following today's iPhone 6 and Apple Watch event.
Analyst Trip Chowdhry noted the following items:
Apple Watch:
- Ground breaking User Interface - now we know what the ex-CTO of Adobe was up to at Apple
- Android Wear is probably back to the drawing board - it is no match to Apple Watch
- Apple Watch Kit for developers to create Watch Applications. Now AppStore will have Apps for Watch, in addition to Mac, iPhones and iPads - strengthens the developer ecosystem and enhances Apple AppStore revenues
- Apple Watch Works with iPhone5, iPhone5S, iPhone 6 and iPhone6+; which gives another reason for users on previous iPhones, i.e. before 5S to upgrade, to iPhone 6 or iPhone 6+
- Apple will need to learn from its mistake from iPhone, where it let Android to ruthlessly copy its innovations. Apple will need to be proactive, the prevent ruthless copying of Apple Watch innovations. Right now, none of the Android Wear devices comes even closer to what Apple Watch can do in terms of user interface and capabilities
- As we said in our September 2 note, which is attached below - Secured Element (SE) has to be on the device not in the cloud - and Apple has done that
- Bullet 1 is the only reason for Apple Pay to succeed. Google Wallet failed because they made a bad decision to have SE in cloud
- Apple Pay is available in October 2015, and will only Work with iPhone6 and iPhone 6 +. This is another reason for users to Upgrade to the new iPhone 6
Only smart phone that are "All things to All people" will be a commercial success - based on what we know right now, we think both iPhone 6 and iPhone 6 + will be a commercial success. However, will still need to do some more research...so please remain tuned.
Global Equities has Apple at Buy with a price target of $115.