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Apple Stock: What Catalysts Should Investors Watch For After Apple Event?

Investors should watch for three catalysts after the Apple $Apple(AAPL)$ event.

The first catalyst is better-than-expected volume growth for Apple, as the absence of price hikes for AAPL's new models should be supportive of strong new product sales.

The early signs are encouraging. It’s reported that "the delivery date of several versions of the iPhone 14 Pro and Pro Max have moved into the middle of October" in the US and Canada. Wedbush Securities research report mentioned that, "demand and orders for iPhone 14 are tracking slightly ahead of iPhone 13 and are tracking ahead of our expectations." It looks like Apple's pricing strategy of having a good balance between volume growth and price increases is working well.

The second catalyst is higher-than-expected profit margins for AAPL.

Apple could have made the decision to increase the selling prices of the iPhone 14 Pro and iPhone 14 Pro Max, but this might have led to a higher proportion of users "downgrading" from the Pro iPhone models to the standard iPhone models. Instead, AAPL's choice to maintain the selling prices for the Pro models appeared to have paid off.

Wedbush Securities' research found a "'very heavy' mix towards the iPhone 14 Pro and iPhone Pro Max, which would benefit Apple's average selling price" based on its analysis of demand for the new iPhone models.

A higher overall ASP (Average Selling Price) for AAPL driven by more users opting for the more expensive Pro models (versus the relatively cheaper Standard models)will be positive for Apple's future profit margins.

The third catalyst is new product launches at future events.

The recent Apple event is notable for both the new models unveiled, and what wasn't disclosed or revealed. New iPad and MacBook models could possibly be introduced at the next Apple event in October or November 2022, and there might be positive surprises in terms of specifications or features that excite the market.

The long-term outlook for Apple remains positive.

The investment thesis for AAPL in the long run has always been pretty simple and straightforward. Apple just needs to continue expanding its iPhone installed base and cross-sell more complementary products and services. Positive operating leverage and a more favorable mix with a bias towards higher-priced or higher-margin products and services will help to increase AAPL's profit margins over time.

The recent Apple event shows that the company understands its long-term growth drivers well. By keeping selling prices largely unchanged for most products, AAPL has managed to strengthen demand for its iPhone products while pushing its users to go for the premium and more expensive models or variants.

@TigerStars