Apple ( AAPL ) posted third-quarter earnings this week, topping Wall Street's expectations for earnings by 16 cents per share and beating sales estimates by about $1 billion. Shares of AAPL stock gained about 9% after the report, putting the company's market cap briefly over the highly-anticipated $1 trillion mark. But now, let's focus in on the company's flagship product: the iPhone, including the soon-to-come cheaper iPhone 9 (though that name has not been confirmed).
The iPhone still makes up the majority of Apple's revenue, even as products like AirPods and services like the iCloud have helped bolster the company's growth in recent quarters. During the third quarter, Apple actually posted iPhone sales that were a bit weaker than expected - a reality overshadowed by the overall strong results and the fact that the average price point for smartphones sold was higher than expected.
Remember, the iPhone X stars around $1,000 and was the best-selling phone during the first quarter of the year. You can likely credit it for bumping up that average.
iPhone 9 Rumors
But while Apple is expected to launch two new versions of the X (the iPhone 11 or XI, and a Plus size version), a new cheaper phone is the more important offering for the company right now, as it could expand the audience and get shipments growing again.
As TechRadar noted recently , "rumors and leaks are becoming more frequent, pointing to a larger screen and a mix of a iPhone 8 and iPhone X features."
The cheaper "iPhone 9" is supposed to cost between $600 and $700 - less than the iPhone 8 -and is expected to come in September, as most product launches do. The cheaper version is expected to trade in a 6.1 inch OLED display for LCD and to have an aluminum frame and a single-lens camera. It's also supposed to have a lower resolution and to exclude 3D Touch, CNET noted .
Some analysts have also said they expect the cheaper iPhone to come in right colors like blue and orange in addition to the traditional offerings.
Once again, the name for the iPhone 9 - a number essentially skipped over when the iPhone X came out - has not been confirmed and there's a good chance Apple could give it a new name altogether. But for the sake of speculation, we'll call it that for now since it's indeed expected to be a sequel to the iPhone 8, not the iPhone x .
The Bottom Line on the iPhone 9
With September right around the corner, investors, analysts and tech bloggers don't have too much more time to scratch their heads and throw out ideas about what the iPhone 9 will actually look like or be called. But it's sure to be the center of attention this fall.
The iPhone X faced some skepticism after its release, with many doubting its popularity. But strong shipments and the rise in the average selling price for the iPhone show the expensive model has worked well for the company. I believe the iPhone XI and X Plus will face far less scrutiny this season. And that, as a result, all eyes will be on the iPhone 9.
As of this writing, Robert Martin was long AAPL.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.