Apple's iPhone 7 predicted to spur 8% growth, 2017 redesign seen causing 16% sales spike

Posted:
in AAPL Investors
After the iPhone 6s series saw the first-ever year-over-year decline in iPhone sales, things are expected to be back on the rise for Apple leading into next year with the iPhone 7, and carrying into 2018 with an anticipated redesign, according to investment firm UBS.





Via ConceptsiPhone.




Analyst Steven Milunovich issued a note to investors on Wednesday, reiterating UBS's "buy" rating on shares of AAPL with a $127 price target. He expects the current flagship iPhone 7 series will spur 8 percent unit growth in fiscal year 2017 --?a number he said is close to current Wall Street consensus.



Looking forward to fiscal 2018, Milunovich has predicted that sales of a so-called "iPhone 8" will cause a spike in sales, amounting to 16 percent year over year growth.



Looking back over the last six years of Apple's financials, Milunovich found that the company's stock tends to correlate better with the next 12 months of Apple's results than with six months.



"So all investors have to do is correctly predict Apple's next 12-month results relative to expectations --?a tall order indeed," he joked.









Given historical trends, Milunovich believes investors will begin to discount the anticipated "iPhone 8" cycle in early 2017.



His estimates predict that the iPhone 7 will see revenue grow by 4 percent over the next year, with earnings per share in fiscal 2017 reaching $9.30. Even if user upgrade cycles lengthen, he believes the size of the installed base and maturation of the iPhone 6 series will be enough to drive mid-single-digit growth in iPhone units.



"Given current retention rates, we expect a larger cycle in (fiscal year 2018) as a differentiated model flushes out pent-up demand," he said.



While the newly released iPhone 7 and iPhone 7 Plus have largely the same design as their predecessors, Apple is expected to unveil a completely revamped look for the iPhone in the fall of 2017. The 10th-anniversary handset is believed to feature both a glass front and back, akin to the iPhone 4 and iPhone 4s series, while the front will feature an edge-to-edge display that could hide components such as the Touch ID fingerprint sensor, earpiece and FaceTime camera underneath a new OLED screen.

Comments

  • Reply 1 of 16
    knowitallknowitall Posts: 1,329member
    Or Apple gets a Sammy and loses most of its customers.
    Inherently burn free battery chemistry exits and has in some cases even better performance than current volatile li-ion.
    I hope Apple has this technology in place for its next iPhone, if not the law of large numbers will catch up ...
  • Reply 2 of 16
    ... :|
  • Reply 3 of 16
    Stock manipulation at its finest. This guy has no hard data, no basis for this sort of assumption. Apple already sells the 5 best smartphones on the planet today, and sales won't grow this year. Saturation. Price. Slower updates.
  • Reply 4 of 16
    jungmarkjungmark Posts: 6,694member
    Predictions are worthless as we don't know what the next iPhone will look like or have as a feature set. 
    cali
  • Reply 5 of 16
    tyler82tyler82 Posts: 863member
    Currently have the 5s. I like the iPhone 7 plus and would like the 128 gig version, but at $900 if this new iPhone is coming out next year I'll wait until then if I'm gonna throw down so much $$. Is there reliable evidence that this is the case?
    edited October 2016
  • Reply 6 of 16
    paxmanpaxman Posts: 4,595member
    tyler82 said:
    Currently have the 5s. I like the iPhone 7 plus and would like the 128 gig version, but at $900 if this new iPhone is coming out next year I'll wait until then if I'm gonna throw down so much $$. Is there reliable evidence that this is the case?
    From a historical perspective we can deduce that a much improved iPhone is around the corner. I can personally guarantee it. Holding out for the next new and improved version is and always has been a mugs game, but having said that why change if what you have does the job? If you don't know whether you need to upgrade or not,  you don't. 
    netmagewatto_cobra
  • Reply 7 of 16
    fallenjtfallenjt Posts: 3,976member
  • Reply 8 of 16
    fallenjtfallenjt Posts: 3,976member

    tyler82 said:
    Currently have the 5s. I like the iPhone 7 plus and would like the 128 gig version, but at $900 if this new iPhone is coming out next year I'll wait until then if I'm gonna throw down so much $$. Is there reliable evidence that this is the case?
    The evidence that You can buy the new phone today and upgrade next with the trade in for fraction of cost. I just traded in my wife 16GB 6s for 32GB 7 without paying any difference beside sale tax. 
    cali
  • Reply 9 of 16
    tyler82 said:
    Currently have the 5s. I like the iPhone 7 plus and would like the 128 gig version, but at $900 if this new iPhone is coming out next year I'll wait until then if I'm gonna throw down so much $$. Is there reliable evidence that this is the case?
    I don't know about "this new iphone" (features don't always pan out such as sapphire screens), but it's almost a guarantee that Apple comes out with one new flagship phone a year, and the last one came out just last month.
    edited October 2016 netmagecali
  • Reply 10 of 16
    "Press any key to unlock"? Where's the any key?
    mike1
  • Reply 11 of 16
    k2kwk2kw Posts: 1,740member
    MacBAir said:
    Stock manipulation at its finest. This guy has no hard data, no basis for this sort of assumption. Apple already sells the 5 best smartphones on the planet today, and sales won't grow this year. Saturation. Price. Slower updates.
    Seems like Apple should be able to atleast equal the iPhone6 sales, if not exceed considering the Samsung Note7 implosion.
    This may come down to if people think there are enough new stuff with the phone eliminating the head phone Jack.
    As innovative as the dual cameras on the 7+ are, the camera on the 7 doesn't exceed the Galaxy S7 and the new Pixel phone has been rated the highest.
    Apple should be back on top for the next 6 months not in 3rd place at best till next year.   

    watto_cobra
  • Reply 12 of 16
    mac_128mac_128 Posts: 3,433member
    k2kw said:
    MacBAir said:
    Stock manipulation at its finest. This guy has no hard data, no basis for this sort of assumption. Apple already sells the 5 best smartphones on the planet today, and sales won't grow this year. Saturation. Price. Slower updates.
    Seems like Apple should be able to atleast equal the iPhone6 sales, if not exceed considering the Samsung Note7 implosion.
    This may come down to if people think there are enough new stuff with the phone eliminating the head phone Jack.
    As innovative as the dual cameras on the 7+ are, the camera on the 7 doesn't exceed the Galaxy S7 and the new Pixel phone has been rated the highest.
    Apple should be back on top for the next 6 months not in 3rd place at best till next year.   

    Many pundits I've read seem to suggest that Apple is the next most viable option for Note 7 customers, unless they are committed to the Android platform, in which case Google's Pixel seems to be poised to capitalize on that market. They seem to think Samsung has done some serious damage to their phone brand, including the non-Note 7 phones leaving everyone else to fill the void.

    I suppose now we'll never know how the iPhone 7 would have really fared without the headphone jack against a healthy Android market. 
  • Reply 13 of 16
    netmagenetmage Posts: 267member
    There is no healthy Android market - there is Samsung, and there are a lot of bit players losing money. 
    watto_cobracali
  • Reply 14 of 16
    While we don't know for certain what specific changes will be made in next year's model, we do know it's the 10th anniversary of the original iPhone's debut, and Apple is known to make a splash for special occasions. This will be big.
    watto_cobracali
  • Reply 15 of 16
    k2kwk2kw Posts: 1,740member
    mac_128 said:
    k2kw said:
    MacBAir said:
    Stock manipulation at its finest. This guy has no hard data, no basis for this sort of assumption. Apple already sells the 5 best smartphones on the planet today, and sales won't grow this year. Saturation. Price. Slower updates.
    Seems like Apple should be able to atleast equal the iPhone6 sales, if not exceed considering the Samsung Note7 implosion.
    This may come down to if people think there are enough new stuff with the phone eliminating the head phone Jack.
    As innovative as the dual cameras on the 7+ are, the camera on the 7 doesn't exceed the Galaxy S7 and the new Pixel phone has been rated the highest.
    Apple should be back on top for the next 6 months not in 3rd place at best till next year.   

    Many pundits I've read seem to suggest that Apple is the next most viable option for Note 7 customers, unless they are committed to the Android platform, in which case Google's Pixel seems to be poised to capitalize on that market. They seem to think Samsung has done some serious damage to their phone brand, including the non-Note 7 phones leaving everyone else to fill the void.

    I suppose now we'll never know how the iPhone 7 would have really fared without the headphone jack against a healthy Android market. 
    For most users they will pick up what in their local Verizon, ATT, Sprint, or T-Mobile store.   Unfortunately that won't include the HTC One10 and other phones no longer stocked by the carriers.     Will google really up their advertising.    The pixel is only on Verizon also.
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