The iPhone 7 probably won’t be enough to reverse Apple’s declining sales slump when it reports earnings tomorrow. But analysts say Apple is sitting on a “powder keg of dramatically aging” iPhones that could lead to a super-cycle of upgrades in 2017.
Here comes the boom!
“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 said, according to a Business Insider report.
Arcuri claims that by Summer 2017, 43 percent of iPhones in use will be older than two years. All those old iPhone should translate into tens of millions of upgrades. Unless people decide their two year-old iPhone is still good enough.
This isn’t the first time we’ve heard that pent up demand for a new iPhone design will trigger an avalanche of sales in 2017. Gartner’s researchers predicts premium smartphone sales will grow 3.5 percent next year. BMO Capital Markets also created a chart (see above) showing its theory that the iPhone install base will ready to burst with upgrades in 2017.
