Why The iPhone Dilemma Is Worth It

Posted by Kirhat | Wednesday, June 29, 2016 | | 0 comments »

After the dust has settled and the rumor debris cleared, it became clear that the upcoming iPhone 7 and iPhone 7 Pro, if this really will be their names, will feature no major changes.

The more recent report, which could have been planted by Apple's PR team, made it clear that the new iPhones launching this year will include minor updates just as what was seen in credible leaks. It looks like the photo that seemingly gave the public their first look at a real iPhone 7 was indeed likely genuine.

Apple shares dipped on the news before quickly recovering and then actually gaining, but the internet wasn't quite as forgiving. In fact, bloggers where whinier than ever last 21 June when covering this year's upcoming iPhones. Should they be angry, or is all this complaining totally off base?

Apple has had tremendous success sticking to a certain formula with its iPhone launches. First Apple releases a new iPhone, then Apple releases an updated iPhone "s" that looks the same but packs more power and new features. This year, however, Apple is essentially going to release another "s" model despite the fact that its followers are due for a redesign.

People always resist change, so the reaction to news isn't terribly surprising. But here's the thing: Strategically, now is the perfect time to make this huge change and wait another year before launching a redesigned iPhone.

First of all, next year marks the tenth anniversary of the original iPhone. There's no question Apple was going to save its big new launch for 2017, and according to rumors it's indeed going to be big. Reports suggest it'll sport a nearly edgeless OLED display with no home button. Instead, Touch ID will be embedded right in the new iPhone model's display.

Should Apple have devoted time and resources to launching two completely redesigned iPhones in consecutive years? That's just not how Apple works right now. One or both of them would have compromised in too many areas, and the user experience would have suffered as a result. By launching a second "s" model of sorts before the big 2017 refresh, Apple is using a tried and true model as its base and building in more power and new features on top of it.

But there's another important consideration here. The 2016's iPhone 7 and iPhone 7 Pro launch will mark two years since the iPhone 6 and 6 Plus were released. Apple's iPhone 6 and 6 Plus sales were absolutely insane thanks to pent-up demand for iPhones with larger displays. So beginning in September and carrying through the following quarters, tens of millions of people will be due for an upgrade

It's quite possible that iPhone sales will continue to slide a bit in the quarters following the iPhone 7's release, but that slide will be minimized by the waves of iPhone 6 owners who want new iPhones. And of course, every US carrier offers phone leasing programs now, as does Apple, so getting a new iPhone 8 next year after picking up a new iPhone 7 this year won't cost anything beyond an activation fee.

Long story short, releasing a second "s" series in 2016 is the right move from a business sense, and that's likely a big part of the reason that Apple's stock recovered so quickly.


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