How Oppenheimer Sees Upside for Coming Apple Product Event
March 18, 2016 by Chris LangeApple Inc. (NASDAQ: AAPL) is preparing to hold a large press event in the coming week, which is anticipated for new product announcements. While one key analyst expects to see several “under the hood” improvements across devices, it is not expecting the same exuberance as last year when Apple shared final details of the Apple Watch.
Moreover, the firm worries investors will find the next several Apple media events underwhelming. In its most recent report, Oppenheimer made predictions of what it expects to see over the next two years. The firm expects excitement to return as it predicts 360 capture to be introduced for the iPhone, an OLED display, deeper Siri integrations, Apple’s first Internet of Things device for the home and a mobile VR headset.
The iPhone cameras best embody Apple’s ability to elevate off-the-shelf components with superior software engineering skills to differentiate themselves from competition. Oppenheimer believes a series of major overhauls are in line for the upcoming iPhones. It sees 360 video and depth sensing as the most likely new features.
Oppenheimer believes Apple will continue to push wider deployment of Siri. This year, the firm believes Apple will encourage third-party developers to link with Siri in more meaningful ways, as a counterattack to “OK Google” and Amazon Echo.
In the report, Oppenheimer detailed:
We believe Apple has been building up to release a mobile VR headset based on potential changes in display technology (OLED), GPU improvement (consistent doubling of performance in recent iterations), and the introduction of more sophisticated sensor fusion, all of which will allow Apple to introduce a VR headset that utilizes current iPhones or iPads.
The firm concluded:
We believe Apple’s broadened device line-up and improving user experience will continue to add leverage to its ecosystem, allowing the company to engage and retain users previously untouched. It does this in small steps—and ultimately enables the company to create the next big thing. We don’t see this model changing—but we do believe it could frustrate investors.
As a result, Oppenheimer has an Outperform rating with a $120 price target.
Shares of Apple were trading at $105.95 on Friday, with a consensus analyst price target of $134.13 and a 52-week trading range of $92.00 to $134.54.
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