Apple Inc stock needs much more than the iPhone Supercycle to hit $200. What could be the next growth driver for AAPL stock?
Shares of the Cupertino, California-based tech behemoth Apple Inc (NASDAQ:AAPL) are at their all-time highs. AAPL stock shot up to a new all-time high of $144.04 in yesterday's (March 28) trading session, before closing at a new all-time high close at $143.80. Apple stock is flying really high in 2017, outperforming the broader markets by some distance with more than 24% gains YTD. The latest highs came on the back of another bullish analyst report from UBS analyst Steven Milunovich who suggests AAPL stock could breach the $200 mark in the next two-to-three years. According to him, the iPhone 8 Supercycle, Sustainable Growth and Innovation would be the key drivers of AAPL stock. We recently covered one more major catalyst which could be a potential growth driver for Apple stock. However, as Steven Milunovich highlights that the most profitable tech company needs something more than the Supercycle and sustainable growth for the stock price to keep heading north. That something more could be in the form of innovation in the voice-powered assistants. Here's why.New Siri features can be the catalyst to drive AAPL stock to $200.
A Barron's post captures Steven Milunovich's roadmap for AAPL stock to the $200 mark. In the post, it is pointed out that "investors are primarily focused on quarterly iPhone sales and the potential of Apple’s services business". However, for Apple stock price to hit $200, the iPhone maker needs to "show that its wearables have mass appeal and that the overall Apple ecosystem is more sticky than investors originally thought." For this to happen, Siri could play a great role to help the company hit the magical $200 stock price mark. Latest reports now suggest that the next version of Apple Watch software will let the user talk to Siri via Apple watch in order to interact with third-party apps. A TechCrunch post states that "Being able to use your apps via a wrist just by speaking will be a big step forward in terms of voice-based computing, and something that could even make Apple Watch seem more appealing to those who haven’t yet seen the need for smart wristwear." Such innovations would go a far way in breathing life into declining smartwatch sales. This is very vital for Apple Inc. (NASDAQ: AAPL) to hit $200 stock price mark as per the UBS analyst's thesis.
A Time article states that to develop the most advanced voice assistant and Voice-Activated Internet (VAI) player is turning out to be the next big arms race in tech. Apple was one of the first companies to get a voice assistant on the smartphone. According to Appleinsider.com, Siri 'exclusivity' on iPhone 4s had helped Apple boost its sales and had also helped it to stand out in the increasingly competitive smartphone market. However, Apple has now fallen behind in the space even though a total of $215.6 billion worth of products and services reportedly incorporate voice-first functionality through Siri. The above Times article, for now, sees Amazon (NASDAQ:AMZN) winning the next big tech war with its voice assistant Alexa. To add to that it is reported that Voice-Activated Internet (VAI) players present a $10billion revenue opportunity for Amazon. The race to build the next Jarvis has really gathered pace of late. Thanks to Amazon Echo and Google home devices which have opened a few eyes in the tech world, the opportunity in the voice assistant space beckons and if Apple fails to get its act together then Siri could become irrelevant within a year.
However, Apple seems to have decided to step up with reports of Amazon Echo-style smart-home device based on Siri doing the rounds. Also, a report from Digitimes suggests that Apple is working on an improved version of Siri. This could make its initial appearance along with the new iPhone8. If Apple were to pull out something as innovative as this Forbes post suggests, the new iPhone 8 Siri features could kill the competition and could further act as a catalyst to the iPhone 8 supercycle similar to the iPhone 4s example cited above. Apple has gathered pace in the voice assistant space with recent reports stating that Apple’s Siri is competing with Amazon's Alexa "for a spot in Marriott International’s Aloft chain of hotel rooms, with both in testing at the Aloft Boston Seaport location to help inform the lodging giant’s decision." A win here for Apple could mean much bigger success later on as Marriott’s Toni Stoeckl said their company uses Aloft as a sort of tech trial space to understand what could work across their portfolio of hotels.Summary.
With the success of Alexa, the voice assistant space has really opened as a new multi-billion dollar revenue opportunity. It would be a shame if the world's best-positioned, most profitable tech company fails to capitalize on it. However, Apple Inc seems to take the Siri opportunity seriously and has been making relevant acquisitions, like that of Australia-based machine learning startup Turi in August 2016, to further strengthen the functionality of Siri. For the Apple Inc (NASDAQ:AAPL) stock to reach the $200 mark, the tech giant will have to show investors that it has much more than the iPhone launches under its belt. Siri could be a big catalyst for this to happen as discussed above. The emerging AR trend could also be a good long-term growth driver for AAPL stock. AAPL stock continues to remain a good buy. Not surprisingly, Apple is one of our top stock picks, which have beaten the NASDAQ by over 137%. If you're looking for auto picks, we also have a list of our top auto stocks, which have beaten the S&P 500 by over 170%.