8 Reasons Apple, Inc.'s iPhone 8 Launch Is So Important
It's official. Apple (NASDAQ: AAPL) has just sent out media invites to its annual fall product event, confirming The Wall Street Journal's earlier scoop that the event would be on Sept. 12 at Apple's new Steve Jobs Theater in Cupertino.
In line with the usual iPhone product cycle, the event will almost certainly be focused on the launch of the "iPhone 8." But the company is also rumored to debut a new Apple Watch and Apple TV set-top box at the event as well.
The iPhone 8, of course, is expected to steal the show. Here's why the new device is so important for Apple.
1. It's been three years since the iPhone design has changed.
The latest iPhone is expected to be a major update from its predecessors. And it should be: It's been three years since the iPhone's form factor was overhauled. The last time Apple redesigned the iPhone's exterior was when it launched its iPhone 6 and 6 Plus in September 2014.
2. Apple stock has been on a tear.
The stakes are high for the Sept. 12 event. Apple stock has been on a tear, up 42% year to date and 10% in the last month alone.
The higher stock price brings along with it a much steeper valuation. Apple's price-to-earnings ratio has climbed from around 14 at the beginning of the year to almost 19 today.
3. The iPhone is Apple's biggest product segment -- by far.
Apple accounts for the lion's share of Apple's revenue. Indeed, in the trailing 12 months, iPhone represented 63% of the tech giant's total revenue.
4. The iPhone is likely Apple's most profitable product segment.
While Apple doesn't break out its operating profits by product, commentary from management and analyst estimates over the years suggest the iPhone is its most profitable segment. So, the iPhone's share of the company's operating profits likely exceeds its already impressive share of revenue, ultimately turning the iPhone into a product that can make or break Apple's financial results.
5. In a post-Steve Jobs era, Apple still has a lot to prove.
Sure, the Apple Watch was developed and launched under Tim Cook's leadership. But it was Jobs who brought the iMac, iPhone, and iPad -- the foundations of three product segments that continue to outshine the Apple Watch.
If the iPhone 8's overhauled design, along with its expected feature-rich technology, is impressive enough, the new device could revive Apple's reputation for industry-leading innovation.
6. Investors are wondering whether iPhone has peaked.
While iPhone sales growth has returned recently, it's still slow. In the most recent quarter, for instance, iPhone revenue was up just 3.3% year over year.
With iPhone revenue growth coming down so significantly from where it was just a few years ago, there's some concern that iPhone sales may have peaked. Will an iPhone 8 with an overhauled design reinvigorate iPhone sales growth?
7. The iPhone helps sell other Apple products.
Apple management has long referred to the iPhone as a halo product. Consumers who switch to the iPhone join a comprehensive and carefully integrated ecosystem of hardware, software, and services. Thanks to Apple's high customer loyalty and its fast-growing services segment, an iPhone customer is likely to buy more from Apple than the iPhone itself.
8. It's the iPhone's 10th anniversary.
It's been just over 10 years since Apple launched the first iPhone, making the iPhone 8 the 10th anniversary iPhone. Introduced in January 2007, Apple started shipping the first iPhone to customers that same summer.
With the iPhone 8 launch taking place on the iPhone's 10th anniversary and at the new Steve Jobs Theater, it's fair to say the pressure is on.
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Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.