Though the iPhone 8 is still several months away, most analysts believe that the 10th anniversary iPhone will trigger a massive upgrade cycle. Now the most respected Apple analyst has just said that the iPhone 8 would kick off an “unprecedented” upgrade cycle, shattering all the previous sales records. The current record is held by the iPhone 6 and 6 Plus, which sold an estimated 110 million to 120 million units in the second half of 2014.
Only one variant to have OLED display
KGI Securities analyst Ming-Chi Kuo said in a research note to investors that Apple was gearing up to launch three different models of the iPhone 8. Two of them – 4.7-inch and 5.5-inch – will be iterative updates to the iPhone 7 and 7 Plus with a glass chassis and wireless charging. The third model will have an all-new premium form factor with a bezel-less OLED display. The home button and fingerprint sensor will be embedded in the display itself.
Kuo says the 4.7-inch model will attract the lower-end of the market while the premium OLED display version will encourage high-end customers to upgrade. The well-connected analyst added that wireless charging will be incorporated in all three variants of the device, making them compelling for consumers. Most smartphones that support wireless charging need to be placed on a mat. But Apple’s technology is expected to allow users to charge the devices from a distance of up to 15 feet.
Apple testing about a dozen iPhone 8 designs
The exciting updates and a new form factor would help Apple sell more iPhones in the second half of 2017 than in any previous cycle. Apple suppliers are reportedly ramping up their capacity to produce between 120 million and 150 million iPhone 8 units by the end of 2017. The third variant of the device is said to have a screen size of 5.8-inch, but some of that space could be used to wrap the display around the edges. According to 9to5Mac, the actual touchscreen area could be only 5.2 inches.
Kuo’s report comes just days after the Wall Street Journal reported that the Cupertino company was considering almost a dozen designs for the 10th anniversary iPhone in 2017. At least one of them includes a flexible screen. The analyst added that Pegatron would be the exclusive supplier of the 4.7-inch iPhone 8.
iPhone 8 could hurt Apple’s profit margins
Selling a record number of new iPhones may not help Apple collect record profits. Rod Hall of JPMorgan pointed out that the manufacturing cost of iPhones has been increasing consistently. The OLED display could alone add up to $50 to the cost of production. Wireless charging and all-glass design could push the costs higher. JPMorgan believes that the all-glass design would require more “expensive” machining of the metal support frame under the glass.
It means the iPhone 8 could have lower profit margins than most investors expect. Apple rarely settles for lower margins. It would be interesting to see whether the company chooses to sell the new iPhones at higher price points.