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1 Reason to Be Excited About Apple Inc.'s Upcoming Product Cycle

By Ashraf Eassa – Apr 22, 2018 at 5:21PM

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Putting new phones out on time will help Apple boost sales.

Apple's (AAPL -4.91%) current product cycle got off to a bumpy start. The company announced three new iPhones in mid-September -- iPhone 8, iPhone 8 Plus, and iPhone X -- but it only began shipping the former two in September. Apple didn't even begin taking pre-orders for the iPhone X until late October, and deliveries didn't begin until early November.

The fact that Apple's iPhone X was late in coming to market -- at least, later than the iPhone 8 and iPhone 8 Plus -- probably hurt its chances in the market. Some potential iPhone buyers might've gone for the iPhone 8 or iPhone 8 Plus rather than wait for the iPhone X, while others might've decided that they'd rather wait for the next iPhone since the iPhone X's life as Apple's flagship device would be shorter than usual. 

Apple iPhones in a mosaic pattern.

Image source: Apple.

On top of that, since Apple's iPhone X took so long to come to market, the device had less time as, arguably, the most advanced smartphone available as competitors launched their responses right on cue

For Apple investors, there's one bit of good news for this coming product cycle: Apple is unlikely to stagger the launches of its new devices. 

What this means for Apple's business

During this coming product cycle, Apple is expected to launch three new iPhones: a successor to the iPhone 8/iPhone 8 Plus with a liquid crystal display, a successor to the current iPhone X, and a larger version of the successor to the iPhone X. 

While these devices should differ in important ways such as display technology, memory capacity, and casing materials, they're all expected to significantly share internals, and they're all expected to incorporate Apple's depth-sensing TrueDepth front-facing cameras. 

The TrueDepth cameras proved to be a key bottleneck in the production of the iPhone X last year, but Apple seems to have worked hard to ensure that multiple suppliers are ready to supply Apple with large quantities of key components for the TrueDepth cameras this year.

Moreover, based on everything that's leaked out about the device, it doesn't seem as though Apple is going to be making any bold or radical changes to its iPhones this year -- it's all about building on the strengths of the iPhone X. 

Since it doesn't seem likely that Apple is going to face any show-stoppers in trying to build this year's new iPhones, I don't expect we'll see either a delayed announcement or delayed availability of any of the models. 

If Apple can deliver on that, its latest devices will have more time in the sun as, arguably, the best and most advanced smartphones in the market. The competition will surely respond, as it does every year, but the longer Apple is able to sell its latest phones before competitive responses arrive, the better Apple's total iPhone sales over the course of the product cycle could be. 

Considering that iPhones make up more than half of Apple's annual revenue, and considering that the company only releases new flagship devices once a year, it's imperative that Apple maximize its unit shipments and revenue within a given product cycle. 

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

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