Apple
AAPL
is expected to switch from Lightning charging to USB-C for powering its latest flagship iPhone 15 along with AirPods and other accessories by the second half of 2023.
Apple launched the Lightning connector with iPhone5 back in 2012, replacing the 30-pin dock connector with a smaller and reversible plug. Apple is still expected to produce the iPhone 14 line-up with Lightning charging later this fall. However, Apple already shifted most of the iPad line-up from Lightning to USB-C.
Per the famous Apple
analyst Ming-Chi Kuo
, AAPL’s initial aim of going completely portless was extremely ambitious and even though management was planning to launch iPhones without any charging ports as early as 2021, it is unlikely to be released soon. Kuo cited that going completely wireless would cause more problems for AAPL due to current limitations of wireless technologies and unsafe MagSafe ecosystem.
Further, the switchover from Lightning charging to USB-C port could improve iPhone’s transfer and charging speed, thus improving its performance amid tough competition.
Per
9to5Mac
, recent regulatory pressures from Europe are forcing Apple to make the switch, as EU fights to implement new charging standards. The International Market and Consumer Protection Committee aims to implement new rules to help consumers avoid the need of new charging cables every time they buy new devices.
The EU continues its fight to make USB C charging the standard format for portable devices. This move comes as part of the EU’s broader plans to reduce e-waste. Annually, almost half a billion chargers are imported in Europe, generating 11,000-13,000 tonnes of e-waste. Against this grim scenario, single chargers for mobile phones and other portable devices come to the rescue to reduce e-wastage and protect the environment.
The changes made by Apple to shift from Lightning to USB-C port are expected to attract ESG compliant investors as AAPL is hell-bent on investing in making technological upgrades to ward off competition.
Shares of Apple, which currently carries a Zacks Rank # 3 (Hold), have fallen 17.1% in the year-to-date period compared with the Zacks
Computer and Technology
sector’s decline of 25.7%. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Apple Upgrades: The Key to Neutralize Competition
Apple’s recent enhancements across its various platforms are expected to attract more customers to its various products and services, thus driving its revenues.
AAPL is anticipated to bring in more upsides as management recently announced that it will be hosting its Worldwide Developers Conference (WWDC) in an online format from Jun 6 through Jun 10.
During the WWDC, Apple exhibits its latest innovations in iOS, iPadOS, macOS, watchOS and tvOS.
AAPL is expected to update iOS and watchOS with new health-tracking features after expanding its Fitness + program by introducing a postpartum fitness module.
Apple Watch’s new upgrade in the Fitness + program will help it fend off competition from the likes of
Garmin
GRMN
.
Garmin has been able to benefit from the growing fitness business amid the pandemic so far with its different smartwatches to suit the diverse needs of outdoor hikers, swimmers and other health enthusiasts.
Per
9to5Mac
, although Apple is far from announcing any update on its mixed reality headset, the beta version of iOS 16 codenamed Sydney is expected to be filled with updates on the headset and its probable interaction with the iPhone.
This indicates that the mixed reality headset is expected to be launched during the lifecycle of iOS 16, thus intensifying competition with
Microsoft
MSFT
and
Meta Platforms
FB
in the augmented reality space.
Microsoft’s HoloLens 2, a mixed-reality device, gained enterprise adoption and captured customers’ attention by developing the next-gen computing technology with the combination of mixed reality and Dynamics 365.
However, Apple’s key competitor in the augmented reality space is Meta Platforms’ Ray-Ban Stories smart glasses, developed in collaboration with EssilorLuxottica, as it indicates its keen interest in building a complete virtual world.
Investors are wary of a higher interest-rate environment continuing in 2022 due to the ongoing Russia-Ukraine war. It already resulted in higher commodity prices, which curtailed U.S. GDP growth in first-quarter 2022. It is worth mentioning that the U.S. inflation rate is currently at a 40-year high.
This economic turmoil suppressed demand for Apple products. The ongoing conflict aggravated the year-long chip shortage, weighing on various industries ranging from PCs to smartphones.
Amid all this turbulence, Apple halted its production in Russia, where it had claimed a 16% market share last year. Consequently, AAPL is lowering its production plans for iPhone SEs by 20%, which is about 2-3 million units, per Nikkei Asia.
iPhone 13 production is anticipated to be reduced by a couple of millions. AirPods production is being reduced by 10 million units.
Apple’s recent upgrades across its various products underline its aggressive strategy to beat competition amid high market volatility.
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