Will iPhone 7 take Back Apple to iPhone Profitability?

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For months now there have been rumours about the iPhone 7 series expected to launch in early September this year. As is custom for Apple or has been for the 2015 iPhone 6s and 2014 iPhone 6 series, an early September launch for the iPhone 7 would not come as a surprise. In any case, iPhone enthusiasts will be expecting it, with most people already expressing their opinions about the new speculations; some happy and others not so much.

The most recent leaks on Social Media show the back side of what is to be the iPhone 7, spotting various similarities to the iPhone 6s but with a bigger camera lens and without the horizontal lines (antennas) across the back. If these leaks are anything to go by, (and Steve Hemmerstoffer who is the person behind the photo is hardly ever wrong), then we could be seeing the newest iPhone much sooner. But will the iPhone 7 help bring back Apple to its profitable glory or will it be another slow update that hurts its profits?

Earlier in April this year, Apple shocked everyone when it announced that its iPhone sales and profits had significantly dropped in the last quarter. This loss was a first for Apple in over 10 years, as the last time the tech giant experienced a loss was back in 2003. For years, the company has been growing at a fast speed, with iPhone sales doubling in number, but this growth was cut short after the iPhone 6s series launched. Being that iPhone sales contribute more than two thirds of Apple’s revenue, the iPhone 7 will have to be received well by consumers if Apple is to recover from the major downfall.

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Apple’s Major Loss and Why iPhone Sales Went Down

For the quarter ending March 2016, Apple reported that iPhone sales had plummeted 16% to reach 51.2 million from the 61.2 million reported the previous year. This then had a major impact on the overall company’s revenue as the iPad and Mac sales have been declining for a while now, with iPhone holding the glue that has kept Apple the most valuable company in five years. iPad sales declined for the ninth time running and Mac sales became the worst hit, even more than the overall PC market. If the iPhone upgrade rate was as it has always been with other new iPhones, then probably Apple would be dancing to a different tune.

So, why did the iPhone sales decline? According to Apple’s CEO Tim Cook, the company only suffered a tough economy that affected two of its largest markets, the United States and China. He went on to say that the losses in revenue were just a pause in its growth, and that Apple was still headed for a bright future. That bright future though is what most people should be worried about and the experience with iPhone 6s is proof that a new iPhone may need more than just a smooth experience to win markets.

When Apple released the iPhone 6s series, it did not feature a major upgrade from its predecessor – the iPhone 6. The notable differences were on 3D touch and Live photos, which did not provide the smooth experience that most people expected with an iPhone. Users complained of a poor battery life, overheating, bad quality screen and low-light photos courtesy of the Live Photo feature, among others. For an upgrade from the highly rated iPhone 6 series, the phone was just wrong. And in a market where other smartphone manufacturers are starting to match up to the iPhone experience with Android alternatives, Apple may need to get off their high horse and focus on meeting demand. The new Samsung Galaxy S7 for example is already selling more units than the iPhone 6s in markets where the iPhone has always controlled the market.

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Will the iPhone 7 revive the iPhone Market?

The iPhone 6s performed poorly as it did not match up to the expectations of iPhone users who needed an upgrade. It was expected to be more powerful but it fell short on delivering that experience, despite its price. Also, most people today already own a smartphone, which has been made possible by other smartphone manufacturers who are providing high end phones at much cheaper costs.

Samsung, Huawei and others already realized this trend and adjusted accordingly, extending to those looking for the smartphone experience at cheaper costs. As a result of this, they continue to see growth as Apple holds its ground on its high-priced gadgets. A recent shift though was earlier in March when Apple released what was its cheapest iPhone so far, the iPhone SE, which is already experiencing a positive response in the market. But even as it comes at a subsidized cost, the iPhone is much smaller in size and the front camera falls short in its front camera, which is a downer for the selfie generation. It’s storage is also bad for many as it only has the 16GB and 64GB models.

When the iPhone 6 was about to launch, people were looking forward to a much larger iPhone than the iPhone 5s and the series did not disappoint. It was bigger, thinner with a sleek design that makes anyone love an iPhone, and the specs were great. Then came iPhone 6s and not many were impressed. With speculations for the iPhone 7 already looming, people are hoping that the device will have more storage, better battery life, better screen resolution, waterproof option like the S7 and wireless charging, among others. It is rumoured that the iPhone 7 will phase out the 16GB storage as a starter model, which could be good news to many but may also lack a headphone jack to accommodate a thinner model, which is a big concern.

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But even with a tweak in specifications, whether the iPhone 7 series will improve sales to a point like the iPhone 6 series did for Apple is almost impossible. Sales dropped significantly in the very two markets that Apple has always counted on to boost its iPhone sales, and developing countries are another case altogether. When they dropped the highest in China, the second largest market for Apple, the tech giant blamed the major decline on the dollar. With the continuing shaky economy, who knows what the dollar will be like then?

Apple’s iPad tablets were once a great source of revenue for the company, but its sales continue to disappoint year after year. The iPhones could also be headed on that same path, but this too we can only wait to know with certainty. From the internet leaks made available, the new iPhone series may include three variants; the iPhone 7, iPhone 7 Pro and iPhone 7 Plus.

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