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Apple to Repair Third Generation Faulty MacBook Keyboard

Apple AAPL recently announced that it will service all eligible third-generation faulty MacBook keyboards without any charges. This comes after the company admitted in March that its butterfly keyboard mechanism continued to trouble a small number of users.

Notably, the presence of dirt inside keys often leads to repetition of letters while typing. At times, a letter does not appear when the corresponding key is pressed. Also, in some cases, the key(s) do not respond in a consistent manner.

Apple, which earlier serviced only first and second-generation keyboards, expanded the service to third-generation keyboards with this announcement per Wall Street Journal quoted by 9to5mac. Thereby, all Mac laptops that feature the butterfly keyboard mechanism are now eligible for the repair program.

The company noted that it is using a new material to repair the butterfly keyboards, which is likely to resolve the current problem. Additionally, it will also cut down repair time.

Apple Inc. Revenue (TTM)


Apple Inc. revenue-ttm | Apple Inc. Quote

Can Upgraded MacBook Pro Aid Growth?

Apple recently upgraded its MacBook Pro’s keyboard mechanism that is likely to eliminate the current keyboard issue per 9to5mac. Additionally, the company introduced faster processors, Intel’s INTC 8th and 9th generation core processors, to its MacBook Pro making it the fastest Mac notebook ever.

Apple noted that with the new processors and other features its “MacBook Pro is the world’s best pro notebook.” Notably, this is the first time MacBook Pro will be available with 8th core processor per 9to5mac.

With improved performance due to the new processors, Apple is likely to see an increase in its user base. Earlier the company bolstered its iMac lineup, 21.5-inch and 27-inch, which is expected to deliver superior performance in terms of computing and graphics.  This is likely to boost sales in the near term.

Trade Issue, Competition May Hurt Apple

Apple is likely to bear the brunt of the ongoing U.S. - China trade war. Per JP Morgan analysts quoted by Wired, the company may have to increase its iPhone cost by about 14% to compensate for the hike in tariff rates.

If Apple chooses to pass the costs to its customers, it may lose subscribers and witness decline in sales. Notably, in second-quarter fiscal 2019, the company witnessed Greater China sales decline 21.5% from the year-ago quarter to $10.22 billion. Also, if Apple decides to take the costs in-house it might take a toll on its profits.

Moreover, increasing competition from China’s domestic brand Huawei, a key reason behind Apple’s disappointing China iPhone sales in first-quarter fiscal 2019, remains a concern.

Notably, in first-quarter fiscal 2019, Huawei displaced Apple to become the second biggest smartphone brand by volume, per Counterpoint Research. Moreover, the Chinese phone maker witnessed growth in first-quarter fiscal 2019 despite the decline in the global smartphone market.

Zacks Rank & Stocks to Consider

Apple currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Facebook, Inc. FB and Intuit Inc. INTU. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Facebook and Intuit is pegged at 20.2% and 16.2%, respectively.

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