Apple Inc. has failed to impress investors and most of Wall Street analysts with its new new iPhone models. Business Insider reported that traders are not thinking that the iPhone 7 will return the tech giant to growth. On September 7 in San Francisco, the iPhone maker announced the iPhone 7, the iPhone 7 Plus, new Apple Watch, and a set of wireless earbuds. Apple shares were down about 2.84% at market close on Thursday, the day after the company unveiled its new iPhone models and other products.
iPhone 7 Isn’t Game Changer
Apple Inc. believes that the iPhone 7 and iPhone 7 Plus are the “most advanced iPhone ever”. The new smartphone features waterproofing, a dual-lens camera and wireless AirPod headphones.
For the first time in 2016, the company reported a decline in the iPhone sales. The company generates about 70% revenue through smartphone sales. After two straight quarters of annual sales declines, the company is hoping the new iPhone 7 will return it to year-over-year growth. The iPhone sales dropped during the third quarter to 40.4 million units versus 47.5 million units sold in the same quarter last year.
On Thursday, Apple shares closed at $105.52 versus $108.36 at close on Wednesday. The stock is down about 15% from its 52-week high at $123.82.
Earlier, a report in Motley Fool suggested that investor expectations are low for the iPhone 7. The primary concern of investors is the iPhone’s popularity. Has the iPhone reached peak popularity?
Sherri Scribner, analyst at Deutsche Bank, said that the the iPhone 7 is “not a game changer,” though “the phone was an improvement over previous models,” Fortune reported.
Gene Munster, who is a long time Apple analyst at Piper Jaffray, said that the iPhone 7 and 7 Plus were “incrementally improved” from last year’s iPhones “but not meaningfully different.”
Bernstein Research analyst Toni Sacconaghi noted that “these improvements do a good job of mirroring consumer needs as we believe potential buyers/upgraders consider photo quality, storage space, battery life, and processor speed when buying a new device.” He added that “the real question is whether the improvements are good enough to spur upgrades.”
Apple Not Releasing First-Weekend Sales
Analysts were shocked with the company’s announcement that it would not release first-weekend sales of the new iPhone, Time reported.
Apple Inc. had provided the first-weekend sales data for years, and this allows analysts to measure the popularity of the device. Investors also love to see that data.
“In years past, we’ve announced how many new iPhones had been sold as of the first weekend following launch,” Apple said in a statement. “But as we have expanded our distribution through carriers and resellers to hundreds of thousands of locations around the world, we are now at a point where we know before taking the first customer pre-order that we will sell out of iPhone 7.”