Analysts say the iPhone is in a critical position right now
No matter its name, this year’s anniversary iPhone is playing a critical role for Apple, especially because it’s one of the most dramatic overhauls of the device in its history.
And an investor note offered by analyst house Guggenheim Securities shows that Apple can’ t afford the next iPhones not to succeed because otherwise, the company would be left with just one division driving the company’s growth.
It’s a well-known thing that the iPhone has been Apple’s main cash cow for many years, but this all changed in 2016 when the smartphone actually declined for the very first time since the launch. This was in complete contradiction to the 2015 performance when the iPhone recorded the biggest growth in history, as the graph attached to the article shows.
But if Guggenheim’s estimates are correct, then the iPhones are in a critical place right now, with 2017 to bring only a small growth, followed by a major boom next year. What comes next is a substantial decline that would have the iPhone no longer being the company’s number one money-making machine, with services to bring home the bacon.
Right now, Apple has no other division that could compensate for a possible decline of the iPhone, the analysts believe, so a collapse of the smartphone would represent a collapse of the company.
“Apple can’t make it up on advertising, since in contrast to consumer Internet companies like Alphabet and Facebook, whose very business models are based on giving away their service for free to then monetize users via advertising, Apple’s customers already paid up for their products, ” the analysts show.
So any follow-on services need to justify their added cost, which is one of the reasons we expect Apple to heavily promote its unique strengths in augmented reality (AR) /ARKit and start spending on exclusive original TV content for its streaming subscribers.”
Apple will take the wraps off the next-generation iPhone next week, with other analysts expecting the anniversary model to be the best-selling model in the history of the company.
