Personal Finance

An Apple Inc. iPhone 7 Conspiracy Theory

Image source: Apple.

Apple 's(NASDAQ: AAPL) current generation iPhone 6s smartphones series has not been the hit that the iDevice maker had hoped it would be. The company experienced its first year-over-year decline in iPhone shipments last quarter, and it's expecting yet another decline in the current quarter.

The lackluster performance of the iPhone 6s generation has led the analyst community and investors alike to look forward to the iPhone 7. Early on, the expectation was that the iPhone 7 would bring both substantial new features and a significant chassis redesign, as is customary for new number iPhones.

However, as time has passed, various leaks suggest that the iPhone 7 will mostly consist of internal upgrades. In other words, an iPhone 6s...s.

Although the new phone may very well turn out to be just that, I can't help but wonder if these leaks suggesting that the next iPhone will be boring are a deliberate attempt at misdirection ahead of the launch of the product.

Apple likely doesn't want people to wait for iPhone 7

With demand for the iPhone 6s series of phones already relatively tepid, it would not be in Apple's best interests for potential customers to get wind of the new features and enhancements that will be coming to this year's iPhone.

If potential customers expect that the next generation iPhone is going to be a modest enhancement over the prior generation one, then they are more likely to upgrade their old phones to the iPhone 6s as soon as practicable.

On the other hand, if customers know something amazing is coming soon, then they are more likely to hang on to their old phones in anticipation of the new product, negatively impacting revenue in the near term.

Apple should understand the importance of iPhone

The majority of Apple's revenue, profits, and ultimately stock price ride on the iPhone. As the smartphone market slows down, and as lower-end smartphones become increasingly capable, Apple needs to bring interesting features and innovations to its devices with each and every new product.

Furthermore, unlike its rivals, Apple only does one flagship smartphone release a year. This means that if Apple doesn't release a product that resonates with consumers (see: iPhone 6s cycle), then the company's financials and stock price suffer for at least the remainder of that cycle.

Apple should understand that phoning it in with any iPhone generation is a surefire way to cause customers to lengthen their iPhone upgrade cycles (or to buy devices from competitors). More than anything, Apple needs to invest aggressively in making sure iPhone stays on the cutting edge.

We'll see what Apple has in store this year soon

Apple is expected to launch its next-generation iPhone in September of this year, so it'll only be three months before the world sees exactly what the company has been cooking up.

Although the next iPhone may turn out to be boring, as some suggest, the lack of truly substantive leaks at this point might mean that Apple has been successful in keeping the next-generation iPhone under wraps.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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