Mike Wuerthele
A new analyst's report is calling for calm, and pointing out that devout Apple fans will likely wait for the "iPhone 8" rather than jump ship to another device by Apple or another vendor entirely.
In a note to investors seen by AppleInsider, Robert Cihra from Guggenheim notes that while it is possible that the iPhone 8 will be delayed, a "short-lived" delay will not ultimately matter to the stock. Any pent-up demand will stay with Apple, and just be shunted to the beginning of the 2018 fiscal year, and extend past the holiday buying season.
Cihra still believes that fiscal year 2018, and in particular, Apple's holiday quarter will be "its biggest in three years. The firm believes that greater than 40 percent of the current install base that exceeds 700 million are now greater than two years old, more than double the number that were during the 2014 launch of the iPhone 6.
Other factors boosting Apple include a tech upgrade cycle will reach out past 2018, as the firm believes that it will take up to three years to roll out OLED screens across the entire line. Furthermore, enhancing a key metric, the "iPhone 8," which will be priced greater than that of any "iPhone 7s," will further boost average selling price.
The company believes that the "iPhone 8" could exceed the selling price of the "iPhone 7s" by up to $400. Cihra believes that the price jump will not be that significant, and notes that the original iPhone was also viewed as too expensive by analysts when it launched in 2007 at $499 with an AT&T contract required and attached carrier subsidies paid to Apple.
Guggenheim has slightly cut its estimate for the quarter ending in September by $0.18 per share as a result of reports of iPhone delays, but is boosting the holiday quarter's earnings per share by $0.25.
The "iPhone 8" is expected to include an edge-to-edge OLED panel with 5.1 inches of usable space, with the remainder dedicated to virtual buttons. Also expected is a larger battery in both size and capacity all encompassed within a form factor similar in size to the 4.7-inch iPhone 7. Also expected is a new 3D facial scanner.
Some reports, including Guggenheim's on Tuesday, peg the possible starting price of the "iPhone 8" quite high. Early reports suggested a cost of more than $1,000, and others as much as $1,200.
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20 Comments
"quit worrying" is probably good advice in this case.
If the informed speculation from people like Gruber is correct, then the iPhone 8 (or whatever it's called) is a halo product, not a mainstream product. It's analogous to the iMac Pro -- a very cool product that both gives people something to aspire to and provides reassurance that if your needs and wealth grow, Apple has you covered with a really awesome high end product. If availability is initially limited, that's no big deal because most people weren't going to buy it anyway. It's the announcement of it that will matter more than availability.
Why do none of these analysts ever bring up the lease/upgrade programs as a factor? This is overwhelmingly important. This is how the vast majority of iPhones have been purchased for the last 2 cycles. This year will undoubtedly be a record-breaking number of leases. The majority of these are also 12 month upgrade programs. People are paying to be able to upgrade every 12 months. Every month past 12 that goes by that Apple doesn't have their flagship iPhone available, customers now have to pay out of pocket for Apple's delay, by making installment payments they wouldn't otherwise be making. It also causes havoc AGAIN next year, when the "8s" comes out on time in September, but thanks to delays the 8-owners' 12 months is in October or November....which means if they want to upgrade at launch (as they expect to and are entitled to) they need to AGAIN pay excessively out of pocket to pay off their remaining installments before they can upgrade.
TL;DR Apple doesn't have much choice but to deliver on time. If they don't, customers literally have to pay out of pocket for their delay.
It was analysts who created the hysteria about the "Anniversary Phone".
It was analysts who created the hysteria about the super cycle iPhone 8, iPhone 7S and iPhone 7S Plus.
It was analysts who created the hysteria about the $1000+ iPhone.
It was analysts who created the hysteria about the in-display fingerprint sensor bring problematic to build.
It was analysts who created the hysteria about the fingerprint being on the back of the iPhone.
It was analysts who created the hysteria about the iPhone 8 being delayed.
This analyst must have fallen out with a lot of people
- The doomsayers who preach that Apple is doomed at every opportunity
- The Shorters who make their livelyhood purely by shorting APPL every three months
- The other analysts like Kuo who apparently know more about the next Apple device than Apple themselves.
Anyway, it is a breath of fresh air not to hear the daily 'doomed', 'delays', 'problems' and other tales of woe relating to anything that Apple is rumoured to be doing.
Wasn't Guggenheim the name of the creepy management consultant in House of Lies?