A research note by Credit Suisse has suggested that iPhone 7 sales may be ‘muted’ as customers wait for the iPhone 8, which looks set to be a much bigger upgrade.
Analyst Report on Apple
In an analyst note released by Kulbinder Garcha of Credit Suisse on Wednesday, he has reiterated his outperform rating for Apple stock, but lowered his estimates for earnings per share for this year and the next. His opinion is based upon anticipated disappointing iPhone 7 sales, due to a lack of significant upgrades.
iPhone 7 – A damp squib
Assuming past practice is a good guideline, the iPhone 7 should be released in September this year. As ever, the Apple fanboys will likely be camping out the night before and there will no doubt be lines around the block as people wait to get their hands on the first models sold.
However, with a lack of any serious upgrade or new features, there are suggestions that sales will be more muted than we have come to expect from the Cupertino, CA giant.
It seems that the newest phone will feature a slimmer body, increased storage, perhaps dual speakers and a better camera. All well and good, but doesn’t really have any ‘blow you away’ new features that will make iPhone 6 owners think that they need to fork out the sums required to get hold of this device.
Increased storage really should have happened before so this is just Apple playing catch up with what was previously expected. A better camera is always welcome, but real photography enthusiasts are likely to have specialized cameras, the iPhone 6 camera is good enough for all your amateur requirements; is a sharper image really enough to motivate the purchase of a new phone?
Dual speakers; useful, sure, enhanced sound, you betcha, enough to render your current smartphone obsolete, no way. Which leaves a slimmer body. Again, good, and happy to have it but is doesn’t really move the goal posts. There is nothing ‘game changing’ in the phone.
iPhone 8 breaking new ground
Expectations for the iPhone 8 suggest a whole different story. If rumors about the new OLED screen are correct, (meaning no back-lighting), allowing more room, (or a thinner device still), and they are far more battery efficient. A full glass display, running from edge to edge, without a physical home button is also on the cards. This means the phone will look radically different, and if we know anything about Apple customers, they like people to notice they are carrying the latest equipment.
Another improved camera is likely to be incorporated, but as discussed earlier that doesn’t move the dial too much. Wireless charging, however, that is the kind of giant leap forward that gets people excited. Battery life is probably the biggest issue experienced by heavy smartphone users. Until they make a battery that can withstand a days solid usage without running out, the next best thing is making charging easier and more efficient. Wireless charging. Bingo.
The taptic engine is also expected to be vastly enhanced. This is the little sensor below the screen, which is able to detect multiple fingers and also how hard or soft you are pressing.
Two or three year cycle?
For all these reasons, it is expected that the iPhone 7 will not generate as much excitement as previous iterations of the phone have done in the past. Recently, Apple has adopted a two-year cycle for major upgrades, (think iPhone 5 and then the following year the iPhone 5s). It looks like the 2016 version will push that back to a three-year cycle meaning the major upgrades will come next year.
Smartphone sales are decreasing across the board. In the first quarter of 2016, Apple saw its first ever drop in smartphone sales. It seems that people are suffering from what industry experts are calling ‘phone fatigue’. This essentially means that people have become tired of shelling out big money for a relatively modest improvement in their phone, so are sticking longer with their older models.
For the full year of 2016, based on schedules of production that Apple provide to suppliers, it looks likely that the Apple smartphone will experience a full year drop in sales, the first time in the company’s history.
Another theory is that perhaps Apple is keeping its powder dry. Knowing that they are facing tough market conditions, why not keep a few extra tricks up their sleeve? After all, the iPhone 8, expected in 2017 will mark the 10-year anniversary to the very first iPhone and we can all expect a pretty significant song and dance to be made about that.