6 reasons the iPhone 6 might disappoint investors

Even if Apple unveils its new smartphone earlier than expected, don't expect it to move the stock.

By Benzinga Mar 12, 2014 2:17PM

Apple logoBy Louis Bedigian


You've already read about the iPhone 6 and why it may not be a big deal to consumers and Apple (AAPL) enthusiasts alike.


But that's not the only thing that investors have to worry about. There are six key reasons why Apple's next-generation iPhone will disappoint the investment community as well.


1. It won't help the stock

Trip Chowdhry, managing director of equity research at Global Equities Research, was a big fan of the iPhone 5S. But he told Benzinga that the iPhone 6 will not be able to move the company's share price.


"iPhone 6 is not going to do it, whether it's good (or) bad -- it's just more of the same," Chowdhry told Benzinga.


2. It could be thinner, but users might not notice

The iPhone 5S is only 7.6 mm deep, making it one of the thinnest smartphones available.

Nonetheless, consumers always seem to want a thinner smartphone. But how much thinner could it get before it breaks just by sitting on it?

And even if it gets thinner, consumers are likely to place their iPhone 6 inside of a thick, rugged case to prevent future damage.


With a case, the device might feel just as thick as last year's edition.


3. Trade-in conundrum

Mark Bowles, founder and chief marketing officer of Outerwall's ecoATM, estimated that his company would see an increase in iPhone trade-ins when the iPhone 5S arrived.

"We will definitely see an (increase), but not before the new iPhone comes out," Bowles told Benzinga last September.


Trade-ins are likely to increase again when the iPhone 6 arrives, but at what cost?

Microsoft (MSFT) has previously offered big bucks to persuade iPhone users to switch to a Windows Phone. The same may not be true of retailers that are buying old iPhones in exchange for the iPhone 6. (Microsoft owns and publishes MSN Money.)


4. Can't upgrade early - unless you pay

Two-year contracts can make it difficult for consumers to upgrade annually. They must either pay a fee to get out of the contract or sign up for a special service that allows them to upgrade more frequently.


Alternatively, consumers could choose to avoid a contract all together and purchase an iPhone at full price. But that (depending on the accompanying cellular plan) could still be very expensive.


5. Consumers want the iWatch, not another iPhone

Chowdhry cannot find a single customer who wants the next-generation iPhone.


"Have you come across any customer . . . that has said, 'Oh gosh, give me an iPhone 6! I've been waiting for it!' No!" Chowdhry told Benzinga. "My research has been very comprehensive. I have not heard of any -- even diehard Apple fans -- saying that they are looking forward to or eagerly awaiting the arrival of iPhone 6. Every person that I've seen, they are saying, 'I have been waiting for an iWatch. I want an iWatch.'


6. Body color could reign supreme

Before the iPhone 5S and iPhone 5C arrived, the rumor mill was overflowing with reports and speculation about the colors that would accompany these devices at launch.


This was not a new phenomenon. In 2011, the media couldn't stop talking about the white iPhone.


Apple likes to change and tweak its color selection as often as possible, so expect another batch of rumors to focus on this element. Another color-specific ad campaign may also follow.


But remember: the color may be different, but that has no impact on the product that rests inside the shiny, metallic (or plastic) shell.


Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report. He recently switched from Android and purchased an iPhone 4. He does not plan to upgrade or switch back to Android in 2014.


More from Benzinga:

5Comments
Mar 12, 2014 2:42PM
avatar
Probably the dumbest article I have read on AAPL in a very long time.  Everything said I disagree with and so do many others.  In short, you are exactly wrong on whether people are looking forward to the IPhone 6.  Bigger screen wanted for a long time alone with their ecosystem enhanced and the China Mobile and DOTCOMO outlets have analysts calling for a $635 stock price before Christmas.  Either you are short the stock or working for Samsung but not sure which or both.  Ridiculous content and when was the last time that Apple put a sorry product of a phone???....they do beta testing by focused market groups to get feedback.   
Mar 12, 2014 6:48PM
avatar
Oh well --- another example of how Tim is no Steve
Mar 13, 2014 6:50AM
avatar
Anybody else think "owens7301" has his brain in an i-Phone "5" and the battery keeps dying? 

In less than 5 years, Apple will return to just being a fruit. The entity and brand will be long gone, son. It's nonsustaining brain-draining technology that doesn't create economy, it destroys it.
Mar 13, 2014 6:52AM
avatar
"... they do beta testing by focused market groups to get feedback."

I saw those people on the Living Dead. Is THAT who they get them so life-like? I-Phone users!!! Hoo-da-thunk?!   
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

115
115 rated 1
269
269 rated 2
445
445 rated 3
614
614 rated 4
684
684 rated 5
678
678 rated 6
608
608 rated 7
454
454 rated 8
310
310 rated 9
138
138 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ARCPAMERICAN REALTY CAPITAL PROPERTIES Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BMYBRISTOL-MYERS SQUIBB CO.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.