Apple shares to drop amid 'unrealistic' iPhone X predictions, says Deutsche Bank
Investor expectations for Apple's sales of the latest iterations of the iPhone are 'more optimistic than realistic' according to an analyst at Deutsche Bank.
The report provoked a 0.7% fall in share prices in early trading, whilst Apple has lost $50bn in market value in September despite still being one of the best-performing large-cap stocks.
"Expectations are pricing in more than Apple can chew," said analyst Sherri Scribner on September 27.
"Deutsche Bank feels that Apple's stock has risen too far, with substantial additional upside needed to drive further share gains from here."
"Our view is that FY-19 estimates need to fall to realistically reflect a year after a strong cycle."
Scribner predicts Apple's fiscal sales for 2019 will drop and reaffirmed her price target of $140 for shares - 9% lower than earlier in the week.
"To beat expectations by a magnitude of $30bn, this cycle would require Apple to ship 45 million more iPhone units in FY-18 than currently expected," continued Scribner in the note to investors.
"This means Apple needs to ship 290 million iPhones in total. We view this as being highly unlikely."
"It is more likely that unit forecasts decline, much like the cycle for the iPhone 6s, and estimates for FY-19 need to come down to better reflect realistic expectations."
Amazon Deploys Cashierless Checkout Tech
On June 17th, the first Amazon Fresh store without cashiers will open its doors to the public. Instead of queueing up to scan their products, customers will be able to grab items off the shelves and head out the door without worrying about checkout. The store will also have Amazon package pickups, kiosks, and Amazon One payment systems, which withdraw money at the scan of a palm.
Most importantly, this will be the first time that Amazon has launched its “Just Walk Out” system in a full-size grocery store. ‘Do customers like standing in lines?’ asked Amazon Vice President Dilip Kumar. ‘This fundamentally tackles a problem of how you get convenience in physical locations, especially when people are hard-pressed for time’.
How Do Customers Pay?
When you walk into the store, you can scan a QR code from your phone’s home screen, a credit or debit card linked to your Amazon account, or Amazon One. As you stroll through the aisles and select goods from the shelves, weight sensors and vision cameras will track what you take. Finally, once you’re finished, Amazon will bill your account sans cashier.
Does It Have Any Competitors?
Startups like Standard Cognition, Grabango, and Trigo have received venture capital investments to pilot similar cashierless technology, but they can’t match the sheer scale of Amazon. Instead, their pitch to retail stores is that they won’t try to outcompete them in the marketplace. For the most part, they pose no threat.
How Did Bezos Get Here?
- 1994: Invests US$10,000 of his own money
- 1997: Takes Amazon public
- 1998: Expands into music
- 1999: Patents “1-Click” checkout system
- 2005: Launches Amazon Prime
- 2012: Acquires robotics company Kiva Systems
- 2017: Acquires Whole Foods
- 2020: Amasses massive profits during the pandemic
Over the past twelve months, Amazon Prime has grown from 50 million to 200 million subscribers. At this point, the company can launch whatever its heart desires.
Where Does Amazon Go From Here?
Instead of keeping its cashierless technology to itself, Amazon intends to sell it to other retailers. An Amazon subsidiary, Whole Foods may also integrate it into its checkout lines. At the Newark Liberty and LaGuardia airports, several CIBO Express stores will install cashierless systems. And the company’s plans extend far beyond the United States. In South Korea, Amazon partnered with Hyundai to launch the world’s first cashierless department store; in India, Bezos announced that he aims to remake the nation’s retail economy.
But Amazon will soon pass hands. On July 5th, 2021—27 years after Amazon was first incorporated—Andy Jassy will take over as CEO and Bezos will move on to other projects. Therefore, it remains to be seen what the remainder of 2021 will hold. But if the company continues on its current path, cashierless tech may soon conquer the retail market.