While Apple’s guidance and industry forecasts alike point to the company reporting another quarter of year-on-year decline in iPhone sales, analysts seem increasingly optimistic about the prospects for next year’s iPhone.
Garter argued earlier this month that the radical new iPhone design expected next year will result in 3.5% growth in 2017, and now Cowen’s Timothy Arcuri is expecting ‘explosive’ growth next year, reports Business Insider …
iPhone 7 is proving an effective ‘bridge’ to the iPhone 10 super-cycle in ’17, where a powder keg of a dramatically aging installed base lurks just under the surface such that C17 Street revs/EPS are 10%+ too low. Raise target to $135, which even still seems too low.
Arcuri’s optimism is based in the fact that, by the time the iPhone 8 (or 10 or whatever Apple calls it) is launched, some 43% of iPhone owners will be using a device older than two years old – the key trigger to an upgrade.
BMO Capital Markets makes a similar point with a chart (above) which it says points to an upcoming iPhone ‘super cycle’ – though it should be noted that it used the same logic to predict record sales for the iPhone 7, something which we noted at the time seems exceedingly unlikely despite a number of positive indicators. The firm also uses the 7S notation for next year’s iPhones, which seems even less likely.
We’ll of course hear the actual numbers tomorrow when Apple announces its fiscal Q4 (calendar Q3) earnings.