Could The iPhone 7 Be The Last Apple Smartphone Upgrade?

Could The iPhone 7 Be The Last Apple Smartphone Upgrade?
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A leading consumer electronics analyst has suggested that the iPhone 7 could be the last smartphone from Apple to feature significant upgrades. Daniel Ives, an analyst at FBR Capital, has indicated his belief that the iPhone 7 could “be the last hurrah in terms of blockbuster upgrades”.

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Could The iPhone 7 Be The Last Apple Smartphone Upgrade?

New revenue streams

Apple has been forced to diversify its income away from the iPhone range in recent years, and there has certainly been the suggestion that we may already have reached a peak in the smartphone marketplace. Certainly the major manufacturers are experiencing diminishing returns with regard to serious innovations in their handsets, and Ives now suggests that Apple may focus attention elsewhere in the future after the release of the iPhone 7.

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Despite the attempts of the consumer electronics giant to create new revenue streams aside from its iconic smartphone, Apple still has a significant dependence on the iPhone series. Sales of the iPhone accounted for two-thirds of its revenue in the fourth quarter of 2015, which is in fact an increase over the same period just 12 months earlier. In Q4 2014, the iPhone range accounted for 54 per cent of Apple income, so it is clear that the company still has some way to go to reduce its reliance on the iPhone range.

The continuing success of the iPhone is certainly a positive for Apple, but it also helps contribute to the impression that the corporation is a one-trick pony. This is obviously something that Apple would wish to avoid anyway, but the consumer electronics behemoth has already explicitly promised the city that it will attempt to generate new income streams in the coming years.

Apple will be keen to live up to these promises, considering that the share price of the company has fallen significantly recently. Although it remains at a fairly healthy level, still being at well over $100 per share, this is an approximate drop of 20 per cent from the peak that it reached in the summer of 2015. While the iPhone range continues to generate record sales, bringing a valuable $51.5 billion for Apple in the fourth quarter of 2015, the perception remains that Apple needs to move away from iPhone reliance.

Minor niches struggle

Yet there are massive challenges for Apple in developing product revenue that rivals the iPhone series. There has generally been a steady decline in the sales of iPads, for example, while new products launched by Apple such as the Apple Watch, Apple Pay and Apple Music have provided no more than moderate income. These three products contributed only 4 per cent of total sales in the most recent quarter, and this represented absolutely zero growth over the same period last year.

While the iPhone 7 has the potential to boost sales for Apple, the continual refreshing of its smartphone product line with modest improvements every twelve months may eventually lead to its appeal diminishing. This is at least the opinion of analysts, with a recent Credit Suisse report suggesting that there could be “subdued iPhone cycle for the next few quarters”. Apple will certainly be monitoring the situation closely, and has a difficult balancing act to carry out in terms of ensuring the long-term survival of the company, while also protecting short-term revenue.

But analysts are certainly in agreement that Apple has to restrategise in the coming years. Holger Mueller, principal analyst at Constellation Research, commented that Apple was particularly vulnerable to falls in iPhone sales, and that its medium-term strategy must be focused on diversification.

“Apple has a large exposure to the iPhone and has not been able to come up with other growth engines. The iPads aren’t selling and the growth in Macs is limited. (Next year) will be a key year for Apple, when it either can innovate around wearables and TV, or it will have to flirt with lower prices (as it did with iPad last month) in order to keep up volume,” Mueller asserted.

Nonetheless, the smartphone market continues to grow for the time being, although even this trend is showing a general decline. The overall smartphone market grew eleven per cent this year, but this declined from 28 per cent growth in 2014, according to the market research group IDC. While iPhone sales have been particularly robust, the long-term prospect of the market seems to be for stagnation.

Latest iPhone 7 rumors

So when Apple does release the iPhone 7, it is going to need to produce something outstanding in order to really inspire consumers. It is perhaps not surprising then that the latest iPhone 7 news points to numerous significant innovations and new features. The iconic and flagship Apple smartphone is being linked with a fingerprint scanner, USB Type-C functionality and an improved version of 3D Touch in the latest reports.

Another new rumor suggests that Apple has produced five iPhone 7 prototypes, with the corporation still working internally on which one should ultimately be produced. This news has been leaked from sources close to the Apple supply chain, with a post appearing on the Chinese social media service Weibo confirming the news.

It also seems increasingly likely that the iPhone 7 will be both waterproof and dustproof, as numerous sources have been reporting this aspect of the smartphone in recent weeks. Additionally, several other Apple products expected in the coming months have also been linked with this feature, as Apple is expected to place more emphasis on health-tracking functionality in 2016.

One particular patent, entitled “Electronic Device With Hidden Connector,” shows a connector covered by a self-healing elastomer. The smart money is on this appearing in the next generation iPhone 7, as Apple attempts to produce a device that really captures the imagination. Other rumors suggest Apple will be removing the 3.5mm headphone jack for the iPhone 7, with the Japanese blog Macotakara having covered this.

As Apple continues to develop its product range, a revolutionary iPhone 7 is essential for the corporation, and it seems plans are well under way to produce exactly this device.

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  1. These guys must have sold a bushel of AAPL calls and need to suppress the stock price till they expire. Where is the SEC when you need them.

  2. Could the iPhone 7 be the last iPhone upgrade? Obviously not. That is an idiotic statement if there ever was one.

    Apple is about continuous and gradual updates to its products. There is always a better model next year. There will be an iPhone 7s, an iPhone 8, an iPhone 8s, an iPhone 9, etc. etc. ad infinitum. Each will be better than the previous generation.

    Goals for the iPhone to achieve but has not yet achieved:
    1. Be faster than the fastest supercomputers in the world.
    2. To completely understand human speech without training.
    3. To have a better camera than any DSLR in existance.
    4. Be able to drive autonomous cars.
    5. Be able to directly interface with the human mind for direct commands and communication of data
    6. Be able to create a holographic 200 megapixel virtual screen through our eyes.
    7. Be able to last 10 years on battery power.
    8. Be able to run a lifetime on fusion power.
    9. Be able to be implanted in humans for direct power and connection.
    10. etc.

    Obviously, there is no end in sight for iPhone upgrades. We are no where near the iPhone’s potential.

  3. Apple still has only 15% of the total smartphone market. I think there is still a little headroom.
    And what about the rest of the smartphone industry? Who can’t even figure out how to make a profit.

  4. If you say something long enough it will come true. Many years ago (1979) a physics major I worked with told me that we were coming towards the end of circuit design because things could not get any smaller. As a software developer I learned many years prior that you should never predict what you cannot prove. Boy was he wrong just like the author of this article.

  5. Scientists believe the sun will burn out in about five billion years, at which time Apple’s profits will surely plummet. Apple is doomed!

  6. Which company wouldn’t like to be in Apple’s shoe when their profits, not revenue, are in the $billions.
    Only analysts see doom and gloom in Apple’s fortune.
    Only analysts see revenue is important when it doesn’t contribute anything substantial to a company’s wellbeing.

  7. You seem to forget that the chips in the iPhone and iPad are greatly increasing their lead over those of other phones and tablets. Also, Swift will greatly improve the type of apps that are available on Apple devices. From a developer perspective iOS is now much easier and faster for development than Java, etc. But pundits don’t seem to get the importance of the underlying hardware and software infrastructure.

  8. Great article! There is no doubt Apple will be in world of trouble if it doesn’t diversify income stream away from iphone, as Android phones continue to improve by leaps and bounds and become cheaper all the time!! But how can Apple replace iphone revenue stream? Apple has not been able to produce another mega hit product for a long time since iphone. Even for Steve Jobs, mega hit like iphone was singular achievement. So is it realistic to expect a logistics expert like Tim Cook out do Steve jobs and pull another monster rabbit out of his hat?

  9. Your FUD articles blow dude. Google’s primary source of income is advertising, yet you don’t see anything from the brain dead tech press about that. D i c k head.

    For good measure, I’ve muted the Value Walk channel so I may never be accidentally subjected to this sort of crap from Chris Morris again. Ever.

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