iPhone 7 demand predicted to be ‘remarkably high’

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Apple iPhone 6s
The iPhone 7's reception will be anything but frosty.
Photo: Ste Smith/Cult of Mac

Forget about the “peak iPhone” problem: Goldman Sachs thinks this year’s iPhone 7 is going to be a big one for Apple.

Coming off the back of Apple selling its billionth iPhone sometime this summer, the bank’s senior equity research analyst Simona Jankowski says the number of people clamoring to get their hands on Apple’s next-gen iPhone will be “remarkably high.”

The Goldman Sachs analyst’s theory is based on an online survey of more than 1,000 U.S. consumers over the age of 18. While Jankowski found that “just” 17 percent plan to buy an iPhone over the next three months, a sizable 44 percent said they would be purchasing the iPhone 7 this fall.

Of these, 70 percent already claim to be iPhone owners, while around 24 percent are so-called “switchers” leaving the doldrums of Android for a brighter, happier life on iOS.

What impresses Jankowski most of all, however, is what she expects to happen with the replacement cycle for Apple’s next iPhone. She writes:

“To us, the most significant aspect of this response is that a third of the replacement demand is coming from current generation (i.e. less than 1-year old phone) users. This could suggest that the iPhone 7 will drive a shorter replacement cycle, perhaps in response to installment/lease plans such as the iPhone Upgrade Program, which allow a user to upgrade to the newest phone every year while maintaining a flat monthly bill.”

In contrast to Apple’s major iPhone 6 redesign in 2014, this September’s iPhone 7 is expected to offer only minor changes to the design, such as the removal of two antenna bands on the back, a dual-lens camera and a slightly thinner body.

Writing about Apple’s forthcoming Q2 financial report later this month, Jankowski says she expects Apple to beat expectations with $54.4 billion in revenue and $2.17 earnings-per-share. That compares to a consensus view of $52.03 billion and $2 earnings-per-share.

She also thinks Apple will announce 53.6 million iPhones have sold in the quarter, compared to a consensus of 50 million.

Source: Barron’s