Apple iPhone revenue to decline in 2017, will revive in 2018: Morgan Stanley analyst

Apple iPhone revenue will see a continued drop that started in 2016, but will see an uptick in sales with the new iPhone 8 in 2018

By: Tech Desk | Published:January 18, 2017 4:18 pm
 Apple, Apple iPhone revenue, iphone revenue decline, Apple revenue decline, Apple revenue to rise in 2018, iPhone 7, iPhone 8, Iphone 8 rumors, Apple iphone supercycle, morgan stanley, technology, technology news Apple is expected to bring significant changes to its smartphone lineup on the 10th anniversary of the iPhone in 2017

Apple iPhone revenues will be seeing a continued drop in revenues in 2017 facing a weaker demand of the flagship product, says Morgan Stanley analyst Katy Hubert, as reported by Business Insider. Huberty believes the anticipation for Apple’s 2017 flagship (iPhone 8) will be muting the sales of the iPhone 7 over the next two quarters for the company. The report comes after Apple has seen three quarters of continued revenue decline starting in 2016.

The iPhone revenue stream is estimated to take a 3 per cent dip ahead of the ‘supercycle’, which is defined by Wall Street analysts as the theoretical upswing in revenue after a year of decline. The blame for this goes to Apple for limiting modifications of the new iPhones in the past three years (three generations of the iPhone).

The rationale behind the surge in the company’s sales is the potential to tap the large base of users who did not upgrade their phones this year. Reports have suggested the Cupertino giant is expected to bring significant changes with the iPhone 8 in celebration of 10 years of the iPhone.

Following the decline of Apple’s revenues in 2017, Huberty’s model predicts a return for the company to strong 20 per cent sales growth for the iPhone in 2018 with the new device. Apple is expected to introduce not two, but three iPhones in 2017. Two of the devices will be updates to the 4.7-inch iPhone 7 and the 5.5-inch iPhone 7 Plus, but with glass backs and wireless charging.

The company is also expected to launch a third higher-end model with an all new display (possibly OLED). Apple is also expected to bring the highest (IP68) dust and water resistance with the 2017 iPhone, higher than the current IP67 rating.

Read: Samsung Galaxy S8 launch date to be March 29: Here’s what we know

Even while Apple’s revenue stream with the iPhone slips, the company is expected to reach $1 trillion in cumulative revenue generated by its iOS ecosystem that was introduced with the first iPhone. According to financial analyst Horace Dediu from Asymco, Apple has sold at least 1.2 billion units of its iPhone in the first 10 years, with the company making $100 billion in revenues from supporting services.

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