Apple is about to take a huge risk with its new iPhone strategy. iPhone sales, iPad sales , and Mac sales are all dropping, which is having an effect on Apple’s bottom line.
Apple needs to release new products this fall to turn things around, especially a new iPhone, given that iPhone 6S sales have been disappointing.
Wall Street analysts have come to a consensus about what this fall’s iPhone — let’s call it the iPhone 7 — will look like and include.
And it’s starting to become clear that Apple is taking a huge risk.
The iPhone 7 will have a few upgrades, according to a Deutsche Bank research note, but ultimately will look a lot like the iPhones currently on the market.
Essentially, Apple is moving to a three-year upgrade cycle. Previously, Apple came out with a new model every other year. In the off years, it took the same basic hardware and upgraded the components.
This year would be the third year that the iPhone would sport the same design it introduced in 2014. And that could depress sales.
A Quartz survey suggests that only about 10% of iPhone-owning adults are planning to buy a new iPhone this year if it isn’t redesigned.
Essentially, Apple may be turning the two-year refresh cycle into a three-year cycle. (Earlier this year, Apple confirmed it plans for iPhones to have a three-year lifespan for its first owner.)
That means people would buy fewer iPhones.
Even Apple may be producing fewer iPhone 7 units this fall because it expects softer demand, according to Deutsche Bank researchers, although the iPhone 7 may end up selling better than the iPhone 6S:
“However, a [year-over-year] production decline does not necessarily imply a YoY sales decline for iPhone 7 (vs iPhone 6S) … Apple seldom repeats a mistake, so we believe it will manage iPhone 7 production volumes conservatively.”
Of course, the upside to this is that if Apple releases a compelling, brand-new, strong-selling iPhone in 2017, it could find a “powder keg” of customers ready to upgrade.