iPhone 7 may immediately be followed by the iPhone 8

Apple logo from inside Apple Store in Boston
Blair Hanley Frank

Even though Apple last quarter generated $50.6 billion in revenue and $10.5 billion in profits last quarter (more than Google, Microsoft and Facebook combined), analysts came away disappointed. Specifically, analysts expressed concern regarding falling iPhone sales. In fact, this quarter marked the first time in history that Apple experienced a year-over-year drop in iPhone sales.

For the quarter gone by, Apple sold 51.1 million iPhones compared to 61.7 million iPhones during the same quarter a year-ago. With many now worried that we've perhaps reached "peak iPhone," Apple is now feeling a lot of pressure to really deliver with the iPhone 7. Further, because 'S' cycle refreshes typically focus on internal upgrades and thus don't generate as much excitement, Barclays analyst Mark Moskowitz says Apple might do away with the iPhone 7s altogether. Instead, the iPhone 7 may swiftly be followed by the iPhone 8 in 2017.

MacRumors reports:

Citing industry sources, Moskowitz says the Cupertino company won't debut a spec-bumped, internally upgraded "iPhone 7s" in 2017, but a completely overhauled "iPhone 8" with "major design changes" and new, next-generation features like wireless charging.

This certainly makes sense from both a marketing and business perspective. One, numbered iPhone upgrades always perform better than 'S' cycle upgrades. That being the case, why wouldn't Apple just abandon its 'S' naming scheme altogether? Second, if the iPhone 8 is truly a significant upgrade, the marketing almost writes itself: Our new iPhone is so amazing we've decided that it's worthy of being called the iPhone 8.

Indeed, rumors surrounding Apple's 2017 iPhone (perhaps to be called the iPhone 8) are already in heavy supply. Specifically, we've seen a number of reports indicating that Apple's 2017 iPhone will sport a curved OLED display. On top of that, some more speculative reports claim that such a device will feature a home button embedded right into the display.

[MORE: They said the iPhone would be a flop.]

Consequently, Moskowitz says the current decline in iPhone sales may simply be a short-lived phenomenon that Apple will soon be able to move past.

Moskowitz's report reads in part:

Silver lining—there might be no "S" cycle in C2017. Our conversations with industry participants suggest Apple could skip the "S" cycle next year and instead jump to IP8. The jump could showcase major form factor changes, including OLED, no home button and wireless charging. In our view, these potential changes could drive a mega cycle, underpinning our C2017 iPhone unit growth estimate of 10.3% vs. 6.3% previously.

As for the upcoming iPhone 7, which will presumably be showcased this coming September, recent leaks suggest it will largely look exactly like the iPhone 6s, albeit a bit thinner. Of course, the most intriguing rumor surrounding the iPhone 7 is that it will ship without a traditional 3.5mm headphone jack. Instead, audio-out will reportedly be handled by the iPhone's Lightning port. Some other features rumored to be planned for the iPhone 7 include a bigger battery, a dual camera system (only on the 5.5-in. model), more storage, a speedy A10 processor and, last but not least, a water and dust-proof design.

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Copyright © 2016 IDG Communications, Inc.

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