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Boring iPhone 7, Could Be a Smart Move For Apple Inc. (NASDAQ:AAPL)

Apple Inc (AAPL) iPhone

Apple Inc. iPhone 7 will be boring and nothing new. A series of recent reports made it clear the new iPhones releasing this year will not have major updates. Apple’s stock dropped on the news (earlier this week), but recovered quickly later and then they actually gained, says a report from BGR, adding “the boring iPhone 7 is the smartest thing Apple has done in years.”

Apple Inc (AAPL) iPhone

Apple breaking a tradition

After a series of reports surfaced Tuesday covering the upcoming new iPhone 7 and iPhone 7 Pro, the expectations with the tech giant have changed. The Cupertino-based giant has had success with its formula of first releasing a new iPhone then release an updated iPhone “S” that looks the same, but has more features and power.

However, this year, despite the fact that the iPhone users are due for a design upgrade, the Silicon Valley giant is essentially going to release another “S” model.  The users resist change always, and hence, the reaction to recent news is not very surprising. “But here’s the thing: Strategically, now is the perfect time to make this huge change and wait another year before launching a redesigned iPhone,” says a report from BGR.

Next year marks the 10th anniversary of the first iPhone, and there is no question that Apple Inc. was going to save its big launch for 2017. Year 2017 is indeed going to be big, as per the rumors. The 2017 iPhone will sport a nearly edgeless OLED display with no home button, reports suggest. Also, the Touch ID will be embedded right in the display of the new model.

Why releasing another “S” is a right move?

Apple Inc. is using a tried model of building in more power and new features by releasing a second “S” model of sorts before the big 2017 refresh. However, there is one other consideration here. The launch of the iPhone 7 and iPhone 7 Pro in 2016 will mark two years since the launch of iPhone 6 and 6 Plus. The sales of iPhone 6 and iPhone 6 Plus were insane given the demand for phones with larger displays. Therefore, tens of millions of people will be due for an upgrade.

Following the iPhone 7’s release, iPhone sales may continue to slide a bit in the quarters, “but that slide will be minimized by the waves of iPhone 6 owners who want new iPhones,” the report says. Also, now every US carrier offers phone leasing programs so getting a new iPhone 8 next year after getting a new iPhone 7 this year would not cost anything beyond an activation fee.

Hence, releasing a second “S” series in 2016 is a smart move from a business sense. And, is probably the reason why Apple’s stock recovered so quickly on Tuesday.

On Wednesday, Apple shares closed down 0.38% at $95.55. Year to date, the stock is down almost 11%.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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