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.
"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.
Comments
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But how many do people need? I'm not only fine with Apple not including them, but also not including EarPods and the PSU. Maybe offer them as add-on items with the purchase of an iPhone with a steep discount if you buy any of them with the iPhone, and maybe next year without any discount applied to help mitigate some of the shock from change some buyers experience.
Er, you do realize this is a rumor and not a policy? But I know -- why let that dampen a hater party!?
However it's inevitable that they won't supply these adapters for infinity. I've never even used mine, so I support the conservation of wasted resources. Most folks use the headphones that come in the box, and those who have favorite wired headphones likely already have an adapter or can spring a few bucks for one. Meanwhile, AirPods get more & more popular at my gym. As usual, the whiners & haters will bang their drum, while the rest of the world moves on... Which will you be?
Apple is doing the right thing and the analysts freak out.
Sure there are the vocal minority here, but it's a non-issue I think for most, and even the SamClones are beginning to ditch it as well.
But seriously, it is worth asking when Apple will stop shipping dongles (the answer has to be "some day", and if not today, why?), and also why they still ship Earpods with iPhones. If most iPhones sold are replacing older ones, that means a lot of these are just getting thrown in a desk drawer. I know I'd rather have $15 or whatever shaved off the price of my phone, or even let Apple keep that cash and put it into R&D or employee wages — I don't need more crap.
Anyway, between discontinuing the "free" (nothing is free, it just rolls into the price whether you need it or not) dongle or Earpods, I'd rather see the Earpods get dumped, but neither seems likely at this juncture.