Apple Inc. unveiled new iPhone models Wednesday, featuring a water-resistant design, upgraded camera system and faster processor, betting that after six annual iterations it can still make improvements enticing enough to lure buyers to their next upgrade.

First Look at the New iPhone 7 and iPhone 7 Plus

The iPhone’s main improvement revolves around the new camera. Past models have had only one lens on the back, but the new version features a dual-lens system on the larger iPhone 7 Plus. The technology allows for sharper, brighter photos with better ability to zoom without degrading quality. Apple released a few details about the new phone on its Twitter account while Chief Executive Officer Tim Cook was giving a presentation at an event at San Francisco’s Bill Graham Civic Auditorium. 

Even as iPhone demand has waned in recent quarters, partly due to the lull between product launches, the device continues to be the biggest source of Apple’s revenue. The iPhone is at the center of an ecosystem of products from Apple TV to the Apple Watch that are designed to function in connection with it. The new models will be critical to the holiday quarter, and the world’s most valuable company is counting on them to prop up sales ahead of an expected overhaul of the line in 2017, the iPhone’s 10th anniversary.

David Fuller's view

There are clearly a number of improvements but will it be enough to top Samsung? Many of us will be interested in the reviews, not least from Which Magazine as far as I am concerned.  It definitely preferred Samsung’s phone a few months ago but Apple clearly has some significant improvements. 

Apple (est p/e 13.15 & yield 2.1%) is obviously a wonderful company but I worry about its dependence on phones for such a large percentage of its earnings, relative to Samsung Electronics (est p/e 10.49 & yield 1.3%), according to Bloomberg.  Apple has the better dividend but Samsung Electronics has the more in-form chart pattern, albeit overextended in the short term and commencing a consolidation and some mean reversion towards the rising MA.  Challenges to Apple’s tax positions will not help earnings.  Samsung may face similar headwinds but it is much more diversified.  It also holds a very secure position within South Korea.  In contrast, Apple faces uncompetitive corporate tax rates in its home country and has to keep money off shore because of the USA’s global tax reach.  Apple has yet to break its progression of lower rally highs since its peak and this is required to reaffirm that demand has the upper hand.  The important support is near $90 and I would not like to see that retested.  

Personally, I would not pay up for any share in today’s environment unless it was on the basis of a temporary, speculative momentum move which is still in form.  On a medium to longer-term basis, I would prefer Samsung over Apple, although it has peaked for at least the short term so I would be looking to commence buying on a retest of the rising MA, which is likely to be exceeded somewhat, given the current overextension.