Analyst says Apple may forego Lightning-to-3.5mm adapter for new iPhones
Apple will probably stop bundling a Lightning-to-3.5 millimeter adapter with this fall's new iPhones, according to a Barclays memo obtained by AppleInsider. The multinational bank also cut its price target for Apple stock from $168 to $157, citing worries about a "weaker iPhone franchise."
"We currently model no dongle this year," wrote Barclays' Blayne Curtis. The analyst didn't provide any immediate evidence for the assertion.
Apple has included adapters with the iPhone 7, 8, and X, which otherwise lack 3.5mm jacks. The step is an admission that many people still have headphones, speakers, and other accessories that rely on the industry standard. In 2016 however the company touted its "courage" in removing the jack from the iPhone 7, suggesting it was part of a long-term plan.
Eliminating the adapter could frustrate some people, but would also aid corporate profits by cutting down on parts and packaging.
Pushing down expenses would be a logical step if the company also wants to push down end prices without harming margins, as multiple analysts and rumors have suggested. Outgoing KGI analyst Ming-Chi Kuo recently argued that an expected 6.1-inch LCD iPhone could cost as little as $550, below even the $699 an iPhone 8 currently costs.
Another analyst proposed that this year's 5.8-inch OLED model could start at $899 instead of $999 like the iPhone X. The higher price tag might instead be attached to a 6.5-inch "Plus" phone.
Barclays' reduced Apple stock target, shared by analyst Mark Moskowitz, is based mostly on research indicating "incremental deterioration in [iPhone] demand, particularly for IPX [iPhone X]." Echoing some other researchers, Moskowitz's view is that the price of the iPhone X is too high, and has probably "alienated many users."
He also contends that shoppers' main concerns are battery life, camera and texting functions, which means that average sales prices will decline for Apple and the smartphone industry as a whole.