iPhone 7 May Not Be The Phone Investors Are Looking For

Updated on

The iPhone 6s cycle has been lackluster for Apple at best with reports about multiple order cuts for the newest lineup. Analysts have been reassuring investors by saying that the iPhone 7 cycle will be much better, so there’s no need to panic, but now one analyst says his checks suggest that there won’t be many upgrades from the iPhone 6s.

This could spell trouble for Apple because it means at least another year of consumers not being able to see enough reason to upgrade their devices to the newest models.

iPhone 7 form factor to be similar to iPhone 6s

Barclays analyst Mark Moskowitz said this week that his checks of Apple’s supply chain suggest that the iPhone 7 won’t feature any “must-have” changes to the form factor as compared to that of the iPhone 6s. He said that the device will only have some new and improved components and some small tweaks, according to Fortune. Among the rumors we’ve heard that might fit into this category is that Apple will get rid of the headphone jack.

Moskowitz notes that if the iPhone 7 really doesn’t have many feature improvements from the iPhone 6s, this year will end up being more like a standard “replacement cycle” rather than a “mega cycle” like the iPhone 6 was. The iPhone 6 lineup was the first to feature larger screens, which meant Apple could attract smartphone users who prefer bigger screens in addition to those who already liked its iPhones.

Will Apple break tradition?

If the iPhone 7 really doesn’t have many differentiating updates, then it would be the first time in years Apple has done this on a non “s” year. The regular numbered years are usually the ones with the most changes and updates, which is why most analysts and some investors are banking on this year being a better one for iPhone sales.

Because of his findings that Apple may not be including many upgrades in the iPhone this year, Moskowitz has cut his unit estimates for the device and in fact is now predicting a 1.8% decline compared to the 2.6% increase he had been projecting previously. The Barclays analyst added that his sources said Apple may instead release a phone with major updates next year and call it the iPhone 8 rather than the iPhone 7s.

He believes that the iPhone 8 might finally bring things like an OLED screen and wireless charging, which would bring Apple in line with competitors. He also believes the iPhone 8 might not have a physical home button—a rumor we’ve been hearing for years with past models.

As Fortune notes, Moskowitz’s comments seem to run agree with reports we’ve heard from other reliable sources like KGI Securities analyst Ming-Chi Kuo, who said that next year will bring a major design change with an all-glass phone rather than the aluminum casing Apple has been using for many years. Also media outlets in Korea reported last week that Apple signed a deal with Samsung Display for 100 million OLED displays for next year’s iPhone models.

Apple shares fell by as much as 0.84% to $105.08 during regular trading hours today.

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