What’s Up With Apple: Satellite iPhone, Korea’s Alt Payment Law and More
Sunday’s report from MacRumors that Apple Inc. (NASDAQ: AAPL) is including satellite connectivity in the new iPhone lit up trading in satellite communications stocks on Monday. Globalstar shares soared by nearly 65%, and Iridium stock jumped by more than 15%. Apple stock didn’t do too badly, either. Shares reached a new all-time high of $153.49 and closed at $153.12.
According to a report from Bloomberg’s Mark Gurman, the satellite capabilities of the iPhone will be centered on helping users report emergency situations. At least to begin with, an iPhone will not replace a satellite phone. Gurman’s sources told him that Apple may have the required hardware in the next iPhone, but the two new features “are unlikely to be ready before next year.”
One feature, called for now Emergency Message via Satellite, lets users connect to the satellite network and send a short text message to emergency services. The second feature reports major crises and emergencies, like plane crashes, using the satellite network. According to Gurman, the second feature could automatically send location and medical information and notify the user’s emergency contacts of the situation.
Apple has not commented on the reports, and one of Gurman’s sources noted that the features could be changed before they are released or Apple could still scrap the whole idea.
On Monday, the South Korean parliament approved a bill prohibiting large app stores like the Apple Store and Google Play from requiring that app developers use only the stores’ in-app purchase system. According to the Wall Street Journal, President Moon Jae-in is expected to sign the bill into law because his party “strongly endorsed the legislation.”
While neither Apple nor Google specifies exactly how much revenue their app stores generate, Apple’s Services revenue totaled $53.8 billion in fiscal 2020 and Google’s Other revenue totaled $21.7 billion. Those are the buckets into which app sales get dumped.
The legislation authorizes a fine of up to 3% of a company’s Korean sales for failing to comply with the law.
Research firm IDC reported Monday that smartphone shipments are expected to grow year over year by 7.4% in 2021 to 1.37 billion units. Growth will slow to 3.4% in both 2022 and 2023.
Apple’s iPhone shipments are expected to rise by 13.8% this year, while Android-based phones post a gain of 6.2%. IDC noted that smartphone shipments “have managed to display minimal growth” compared to pre-pandemic 2019. The growth will come from growing markets like India, Japan, the Middle East and Africa, while shipments will remain below 2019 levels in China, the United States and Western Europe.
5G-compatible devices are the primary drivers of growth, even though the average selling price of $634 in 2021 is expected to be flat with 2020 pricing. The average selling price for 4G phones, however, is expected to drop by 30% to $206. Total shipments of 5G phones is expected to more than double to 570 million units this year and to account for more than half (54.1%) of all smartphone shipments by the end of 2022.
Finally, Apple announced on Monday that it had acquired classical music streaming service Primephonic. The service is no longer accepting new subscribers and it will be taken offline on September 7. Current subscribers will receive a free six-month subscription to Apple Music. Apple expects to launch a dedicated classical music app next year based on Primephonic’s interface.
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