Apple feels the bite as iPhone buzz fades

Sales of the smartphone are slowing down, with customers keeping their handsets for longer than anticipated – and analysts expect no new model until 2017 and the tenth anniversary of the iPhone

PUBLISHED : Thursday, 25 August, 2016, 5:33pm
UPDATED : Friday, 26 August, 2016, 5:34pm

For half a decade, the launch of an Apple iPhone triggered the same kind of global hysteria once reserved for beloved music groups – customers camping for days in front of a store, often in Apple-themed costumes.

That may be changing. Low expectations for major changes to the next upgrade, and data showing consumers are holding onto their smartphones longer, suggest the Apple buzz is fading.

Apple said to have three new iPhones planned for 2017

Sales of Apple products dropped more than 20 per cent at Target Corp. during the retailer’s quarter ended July 30, said Target CEO Brian Cornell , contributing to a 7 per cent drop in total sales.

Apple historically introduces new iPhones shortly after Labour Day (the first Monday in September), and if it follows past years’ patterns, it would launch a phone with a major redesign and upgrade, say the iPhone 7 at this year’s event on September 7.

This autumn, however, some analysts including Tim Bajarin of Creative Strategies expect Apple to hold off on a major upgrade, waiting for 2017 and the 10th anniversary of the phone instead.

“I wouldn’t be surprised if next year, Apple skips 8 and 9 and introduces the iPhone 10, for the anniversary,” says Bajarin.

Apple didn’t respond to a request for comment for this article.

Analysts expect three key new add-ons for the next iPhone, which, according to online rumours, will be on the market by mid-September.

First is a dual-camera sensor that is designed to dramatically improve low-light images and make it easier to zoom in on photos; second there will be more internal storage, at 32 gigabytes, up from the standard 16 GB; and lastly the removal of the headphone jack port, which will require consumers to plug their phones and earbuds into the Lightning charging port. This will probably cause them to buy new headphones and buds.

How does Apple sell a new edition with minimal new features? If the camera is really good, “consumers will respond”, says Bajarin. “It depends upon the quality.”

Everything we know about the iPhone 7

Sales for the latest iPhone, the 6S and 6S Plus, didn’t catch fire with consumers like previous models. Apple has reported slumping sales for the previous two quarters, a first for the company, which sent revenue down 15 per cent for the June quarter. iPhone unit sales fell to 40.4 million in the recent quarter, down 15 per cent year over year.

Earlier this year Apple introduced the smaller iPhone SE, which introduced no new features but carried a lower price in a smaller body. While Apple says sales have been strong for the SE, they haven’t been enough to push iPhone unit numbers higher than previously.

iPhone growth ‘a matter of when, not if,’ says UBS

The last major redesign for the iPhone was in 2014’s iPhone 6 and 6 Plus models, which remain Apple’s best-selling iPhone models. Consumers loved the larger screens and improved camera.

But 2015’s 6S and 6S Plus failed to impress in an equal way, with new features like 3D Touch shortcuts and the ability to add short seconds of video clips to your photos.

Some existing iPhone users in the US said they would love to see a 100 per cent waterproof iPhone – like the new Samsung Galaxy Note 7.