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3 Things Apple Must Do at Its Sept. 10 iPhone Unveiling

http://www.fool.com/investing/general/2013/08/31/3-things-apple-must-do-at-its-september-10th-iphon.aspx

Daniel Sparks
August 31, 2013


iPhone 5. Source: Apple.

Apple's (NASDAQ: AAPL) new iPhone lineup is rumored to be unveiled at a Sept. 10 Apple media event. With the stock still trading more than $200 below its 52-week high of $700, the Street will be watching the company closely when it unveils its next generation of smartphones. With negative year-over-year comparisons in EPS for the past three quarters in a row, the iPhone 5 failed to help the company boost its bottom line. For this year's iPhone lineup to potentially have a positive impact on the company's bottom line, Apple's going to need features that introduce an element of surprise and differentiation. Particularly, these three announcements at the Sept. 10 event would help.

A lower-cost iPhone
If there's one aspect to the event that could probably make the biggest difference for Apple, it's the iPhone 5C, or Apple's rumored low-cost iPhone. Why? It could help Apple not only boost the bottom line, but also improve the its overall gross profit margin.

How? Apple's iPhone business is the company's most profitable segment. So even if a lower-cost iPhone had lower profit margins, they will probably be higher than the company's overall average gross profit margin. As Morgan Stanley analyst Katy Huberty suggests, the outsized gain in revenue from increased sales in emerging markets could more than offset the phone's lower gross profit margins, boosting the company's overall gros