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Takeaways from Apple's September Product Announcements

  • Oppenheimer & Co. Inc.
  • September 8, 2022
Why Dynamic Island Matters

Apple has made history many times with its innovative and delightful user interface (UI) designs. However, Oppenheimer analysts hadn't seen as many strokes of genius in UI in recent years until yesterday, when Dynamic Island was revealed. The feature turns an obvious eyesore (blackout area on display left by the TrueDepth camera) into a unique, adaptable, and user-friendly UI feature. Dynamic Island, as a new feature, may be less effective than the upgraded camera at driving new iPhone sales, but it is arguably the loudest reminder of what makes Apple products unique. The hardware and software integrated approach to design has little competition.

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Oppenheimer analysts believe Apple will show stronger resistance to competition with its expanding hardware and software ecosystem. Our analysts expect Apple's significant leadership in accessories such as Apple Watch and AirPods to provide incremental sales growth, deeper moat for core iOS devices, upside for software and network service sales.

At the current stage of smartphone competition, they see little risk of share loss and view shifts in iPhone replacement cycle immaterial. Longer term, Oppenheimer analysts see tremendous value in the Apple ecosystem and its ability to monetize its user base. Apple's substantial capital return program should provide downside protection.

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