Why I’m Worried about the iPhone 8

If you read the various articles and message boards that discuss Apple’s upcoming iPhone 7, you already know it is being portrayed as a minor upgrade of the current 6S+ series. Apparently, suppliers and prognosticators believe Apple is not doing much to the next iPhone that most likely will debut in September. Most believe, at best, it gets a speed bump at the processor level and could even have a better screen and better camera but there will be no radical changes to its design — something that, when Apple does a design change, sets off a super buying cycle for the next 5-6 quarters. Of course, all of this is speculation and we really won’t know what Apple will deliver in a new iPhone until it is finally revealed in the fall. However, it is already being written off as just a so-so product and, while a lot of people will buy it because they are in an upgrade cycle or their current iPhones are on their last legs, these soothsayers believe it will be the iPhone 8 or whatever they deliver in the fall of 2017 that will potentially drive huge sales of iPhones in late 2017 and all of 2018.

I profess, I have no clue what Apple will deliver in this next iPhone although I suspect it will be a much better model than what is on the market today and would not be shocked if Apple has some surprises up its sleeve. But, while I consider most of the scuttlebutt about some new spectacular redesign of the iPhone for the fall of 2017, I don’t completely discount that, perhaps, there is a nugget of truth somewhere in there. We know from patent filings Apple has at least one design in which the entire iPhone is glass encased and there is no home button. All functions would be performed only on the screen. I also believe Apple has been working on new cameras, health-related sensors, new sound and audio processors as well as chips dedicated to enhance AI voice and speech functions that could come out in an iPhone sometime in the future.

All of this talk about a minor upgrade in a new iPhone this year and a super iPhone coming in 2017 is worrisome for two key reasons. Apple has just had three quarters of iPhone sales declines and I suspect that will be the same in this quarter when we get Apple’s next financials in late July. In the past, most new iPhones drove sales into record territories — that is not happening anymore. To some degree, that is OK since it probably reflects the new normal of iPhone sales going forward and, for the financial markets, it resets their expectations going forward. But it also reflects the possibility that all of this speculation of a minor iPhone upgrade will actually keep people from buying new iPhones in the next four quarters as some wait for an iPhone 8 and, as a result, it impacts Apple’s overall sales goals well through next fall.

But the second reason I am worried about a new iPhone in 2017 is that, between now and then, there will be continued speculation as to what they will deliver. It will be expected to be another “Jesus” phone like the original one was called before it came out in 2007.

In other words, the speculation of what an iPhone 8 will be until it launches will be so outrageous and probably over the top that Apple could never live up to the expectations of market prognosticators.

The good news is Apple does not listen to these rumors and just keeps their head down working on new iPhones and delivering the best of breed from what technology is available for that iPhone’s cycle. However, these reports of a minor iPhone upgrade this fall and the possibility of a “super” phone in late 2018 has to have an effect on the buying public’s perceptions of the next iPhone and, in the end, it could cause problems for Apple’s bottom line late this year and early next.

There are two interesting articles I have a link to that are worth reading on this subject.

The first puts forth the assumption the iPhone 8 is the one Steve Jobs really wanted and was the last one that has his design touch on it.

The second has a theory that not bringing out a new design this year is part of a major strategy to drive what it calls the next “super cycle” that will start in the fall of 2017. Time will tell.

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Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

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