The Wall Street has largely been bullish on Apple’s 10th anniversary iPhone 8, which some analysts refer to as the iPhone X or iPhone Edition. The Apple stock is trading near the all-time high on the iPhone 8 hype. However, one Apple analyst thinks that the Wall Street is still not fully appreciating the potential of the iPhone 8 “super cycle.” Morgan Stanley analyst Katy Huberty believes that the 10th anniversary iPhone would be so innovative that buyers would want to upgrade en masse, beating all the Wall Street sales forecasts.
iPhone sales to jump as much as 30% in fiscal 2018
In an exclusive interview with CNBC Pro, Huberty said the 10th anniversary iPhone would have “significant advancements” in technology such as OLED screens, wireless charging, 3D sensors, and other advanced software for artificial intelligence. The next-gen iPhone is said to get rid of the physical home button, replacing it with a new ‘function area.’
The Wall Street currently estimates the iPhone sales to jump 10% in fiscal 2018. Huberty predicts at least 20% growth in iPhone sales in the given period, which would be an impressive growth for Apple. But the Morgan Stanley analyst goes a step further, telling CNBC Pro that her “bull case” calls for a huge 30% growth in the iPhone unit sales in 2018.
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iPhone 8 might not launch in September
Since the iPhone 8 would launch to a much bigger installed base than the iPhone 6, it can easily beat the record of the 2014 phone. However, there are certain things that could limit Apple’s growth. For instance, certain components of the iPhone 8 won’t be ready for mass production until September. It means the phone’s launch could be delayed by a couple of months to November.
Sources familiar with the matter told DigiTimes that TPK Holding would be responsible for the new thin film-based touch sensors for the OLED iPhone. The new sensors would enable 3D Touch on the 10th anniversary iPhone. Sources told the publication that TPK Holding would start supplying the component in the fourth-quarter of 2017, which suggests that the iPhone 8 might not hit the store shelves in September.
Significant rise in the cost of 3D Touch sensors
DigiTimes reports that the new touch sensors would be 60% more expensive than those used in the iPhone 7. While the manufacturing cost of the iPhone 7’s 3D Touch sensors was $9 per unit, it would jump to $15 for the new sensors. Other components may also see an increase in the cost of production as Apple is planning to introduce innovative technologies with the iPhone 8.
The increase in bill of materials (BoM) helps explain why the iPhone 8 is rumored to cost more than $1,000. Apple is unlikely to compromise on its profit margins. It might pass on the extra cost to buyers. The iPhone 7S and 7S Plus releasing this September are rumored to be priced competitively, though.