iPhone 8 Leaks And Rumors Are Hurting iPhone 7 Sales

iPhone 8 Leaks And Rumors Are Hurting iPhone 7 Sales
Image Source: Thiago M Duarte / Ran Avni / ConceptsiPhone / YouTube video (screenshot)

The iPhone 8 leaks and rumors continue to intensify with each passing day. The 10th anniversary iPhone may be several months away, but rumors about a major design overhaul and exciting new features have given potential buyers a reason to wait for the iPhone 8 rather than buying the iPhone 7 or 7 Plus. Apple CEO Tim Cook recognized this when responding to an analyst question during the quarterly earnings call on Tuesday.

Leaks prompt buyers to hold off purchases

The iPhone sales during the second quarter fell short of expectations. Cook said Tuesday that more rapid leaks and rumors “about future iPhones” were affecting the current iPhone sales. Apple has witnessed a pause in the iPhone purchases due to the “earlier and much more frequent reports” about the iPhone 8. Apple is highly secretive about its future products, and Tim Cook is correct about the rumor mill.

Leaks and rumors have played an important role in Apple sales for years. People looking to buy a smartphone in June would prefer to wait if a major update is rumored for September. Rumors of a modest update could prompt them to hold off even longer or switch to an Android phone.

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iPhone 8 to be a major update

The iPhone 8 is rumored to have a giant 5.8-inch edge-to-edge OLED display. OLED panels are more advanced and energy efficient than their LCD counterparts. Apple will reportedly integrate the fingerprint sensor and home button into the display. Leaked schematics revealed that the 10th anniversary iPhone would have a vertically-placed dual-camera system for augmented reality applications.

The upcoming iPhone is also expected to have iris scanning and 3D facial recognition technologies. JPMorgan analysts said in a research note Tuesday that the iPhone 8 would feature wireless charging. The research firm noted that Apple would use Broadcom’s wireless charging chip in the new iPhones. It is unclear whether the upcoming iPhones would support Qi or PMA wireless charging standards. Broadcom makes chips that support both standards.

KGI Securities analyst Ming-Chi Kuo had predicted in February that all three iPhones coming this year, including the iPhone 7S and 7S Plus, would feature wireless charging. JPMorgan added that the upcoming iPhones would also support Bluetooth 5.0, which has a longer range. Bluetooth 5.0 allows people to use multiple Bluetooth devices at the same time.

iPhone sales fall during the second quarter

Apple introduced the [Product] RED iPhone 7 and 7 Plus to help fund programs combating AIDS in Africa and Asia. It also doubled the storage capacity of the iPhone SE, but consumers as well as market watchers are more interested in the iPhone 8. Analysts and Apple fans have sky-high expectations from the 10th anniversary iPhone.

Apple announced Tuesday that it sold 50.8 million iPhones during the second quarter, down from 51.2 million units in the same quarter a year ago. Analysts were expecting the Q2 iPhone sales to top 52.27 million units. The decline indicates that customers might be holding back purchases in anticipation of the iPhone 8. Consumers see the iPhone 7 as an “evolutionary” update, while the 10th anniversary device is said to be nothing less than revolutionary.

For the current quarter, analysts expect Apple to sell 42.31 million iPhones. Tim Cook told investors that the company had significantly underestimated demand for the bigger iPhone 7 Plus. Demand for the 7 Plus was much stronger than the company expected. The strong sales of the Plus variant helped increase the average selling price (ASP) from $642 to $655. That’s why Apple’s Q2 revenues and earnings went up despite the decline in iPhone sales.

The company posted adjusted earnings of $2.10 per share on revenues of $52.9 billion. Apple had reported $1.90 in EPS on revenues of $50.56 billion in the same quarter a year ago. The Cupertino company ended the quarter with $256.8 billion in cash and cash equivalents. The iPhone maker boosted its capital return program by $50 billion and raised the quarterly dividend by 10.5%.

iPhone 8 to launch in early 2018?

While Apple fans are eagerly waiting for the 10th anniversary iPhone, sources inside Foxconn told ValueWalk that the iPhone 8 might not arrive until early 2018. Foxconn is currently expecting orders only for the iPhone 7S and 7S Plus, which will be minor upgrades over the current flagship devices. Deutsche Bank said in a research note that technical challenges and key component shortages would delay the iPhone 8 release.

It’s no secret that Apple is facing difficulties implementing new technologies such as in-display fingerprint sensor and 3D sending modules. Previous reports have suggested that the iPhone 8 launch could be pushed back to October or November due to manufacturing issues. But KGI Securities analyst Ming-Chi Kuo noted a few days ago that the iPhone 8 mass production wouldn’t even start until October or November. It means the phone could launch in December 2017 or January 2018 at the earliest.

To bring the iPhone 8 in time for the crucial holiday shopping season, Apple may choose to drop the 3D sensor and relocate the fingerprint sensor to the rear panel. The 3D sensor is needed for augmented reality applications.

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