Reports sweeping the Internet suggest that Apple may skip a generation with its flagship smartphone series and instead release an iPhone 8 in 2017. This major smartphone release will effectively be a next generation device, as evidence uncovered by a prominent analyst suggests that the iPhone 7 may not be the advancement over the iPhone 6S that has been anticipated.
Barclays leaks
Barclays analyst Mark Moskowitz recently explained to investors that supply chain checks undertaken by the investment bank arm of the multinational suggest that the iPhone 7 will not feature “any must-have form factor changes” compared to the iPhone 6S. Moskowitz believes that the forthcoming handset will instead feature several tweaks and updated components. It is probable that one of these will be the removal of the headphone jack that has been widely reported in favor of a wireless speaker system.
Moskowitz goes on to indicate that “in such a case, the iPhone 7 could be more of a replacement cycle versus a mega cycle (i.e. iPhone 6).” This previous generation smartphone was based around a major design upgrade and a variety of new components, but it seems that the iPhone 7 will not necessarily benefit from such a radical overhaul.
iPhone disappointment
Before discussing the consequences for the iPhone 8, it is first worth noting that this will be something of a disappointment for Apple fans. There had been massive anticipation that the iPhone 7 would indeed be a significant step forward over the iPhone 6S, particularly as the existing smartphone from Apple was in itself only a relatively minor upgrade over the iPhone 6.
But if what the Barclays analyst is saying is correct, Apple will not push the boat out too strongly with the iPhone 7, and instead settle for a practical device that delivers easily achievable new functionality. This does seem like a rather odd decision from the California-based company, as the feeling about the flagship smartphone range recently is that it has been rather too focused on minor, incremental updates.
It must also be said that if Apple were to merely launch a slight upgrade to the iPhone 6S this year, this would be a significant departure from previous policy. It has been traditional for Apple to launch major new designs for the iPhone series every other year, with the interim years being devoted to its S line of products, which tend to be based on the same designs but with minor upgrades offered.
7S skipped for iPhone 8
But what this news also suggests is that it would be logical for Apple to significantly upgrade this smartphone system in 2017, and this would see the iPhone 8 hit the market as opposed to an iPhone 7S. The iPhone range is surely overdue a significant update, and in this respect it would make the release of the iPhone 8 almost inevitable.
In the meantime, Barclays are far from impressed by the prediction that the iPhone 7 will be somewhat underwhelming in terms of new features. In fact, Moskowitz has already revised the estimate for Barclays on iPhone unit sales downwards, perhaps reflecting Apple’s own view that the iPhone would sell less units in 2016 than the previous calendar year for the first time in its history.
Moskowitz now concurs with this verdict, and believes that Apple will sell nearly 2 percent less iPhones in 2016 that was the case in 2015. This is a serious reduction of his previous estimates that iPhone sales would be increased by over 2.5 percent in the calendar year, but the lack of a killer component included in the smartphone has resulted in the Barclays analyst becoming bearish.
This is obviously bad news for Apple investors, and will necessitate the iPhone 8 being released in 2017. A perception that the iPhone 7 is something of an underwhelming disappointment when it is released would really put pressure on Apple to deliver something truly outstanding with the iPhone 8.
Revenue reliance
This is particularly the case considering that Apple is hugely reliant on the iPhone range for revenue, and the suggestion is that the smartphone marketplace is already nearing saturation. Although Apple remains the dominant corporation in the mobile marketplace by a considerable distance, it is struggling to impress consumers in a niche that effectively delivers diminishing returns every year.
On the other hand, it is not all bad news for Apple. Moskowitz is optimistic about the potential of the corporation in 2017, particularly if the revolutionary iPhone 8 does indeed hit the stores. Barclays certainly believe that this will be the case, suggesting that the iPhone 8 will indeed launch next year, and will feature major design changes that the company has decided against including in the iPhone 7.
“The jump could showcase major form factor changes, including OLED, no home button, and wireless charging,” Moskowitz asserted. “In our view, these potential changes could drive a mega cycle.”
Massive sales in 2017
In conjunction with this opinion, Moskowitz is extremely optimistic about the potential of the iPhone 8 in 2017, believing that the handset could contribute to a vast increase in Apple sales in excess of 10 percent. If this is the case, the iPhone 8 could play a central role in boosting the Apple share price; something that the company will be extremely keen to do considering its recent travails in the stock market.
The views of the Barclays analyst have been backed up by rumors that have surfaced elsewhere, with Korean news outlets suggesting that Apple has already agreed to deal with Samsung to build 100 million OLED screens for its 2017 iPhone 8. This would be the first time that Apple has moved away from including LCD technology in its iPhone displays, meaning that the iPhone 8 would be literally unique in the iPhone range. KGI Securities analyst Ming-Chi Kuo has also reported that the iPhone 7 would shun a major design change, and that any such revolution would instead be delayed until 2017.
So it seems at least possible based on this information that some of the features mooted for the iPhone 7 will not appear until the iPhone 8 in 2017.
