But many analysts are predicting that this year's event will mark a major milestone in the latest iteration of the tech giant's flagship smartphone product, dubbed the iPhone 8, being that it's been 10 years since it was first released. Among the flood of rumors, some speculation has stuck: That Apple will release three new iPhone models (the 7S, 7 Plus and a 10th-anniversary 8th generation), with the top of the line model priced at around $1,000 and one if not all models packing features like facial recognition, a dual-lens camera, edge-to-edge screen design with an OLED display and possibly wireless charging.
Ahead of next week's launch, Wall Street analysts have turned their attention to what the big release might mean for Apple later on down the line.
Piper Jaffray analyst Michael Olson took what was perhaps the most surprising stance on the iPhone 8 release, saying that a survey of at least 400 iPhone users showed levels of upgrade intent (or users who planned to swap their current iPhone for the upcoming model) that were similar to last year, showing that consumers may not be universally aware that the new iPhone could pack "more robust features." According to the survey, approximately 16% plan to upgrade to a new iPhone this fall vs. 15% last year, while 24% said they'll "maybe" upgrade compared to last year's 29%. About 61% of consumers don't plan on upgrading their iPhone vs. the 56% in 2016.
Olson also found that the percent of users with iPhones that are two years old or older is almost identical to last year, at approximately 66% of users this year vs. last year's 67%. Ultimately, he believes that Apple's aging iPhone base could work in its favor, as the iPhone 8 is pegged to represent a major departure from previous models. Olsen estimates that Apple can sell about 242 million iPhones in the 12 months after the launch. By comparison, Apple sold 212 million iPhones in 2016, according to FactSet.
In particular, things like the bezel-less screen, facial recognition capabilities and the possibility of a 3D sensing camera, have been signaled as standout features.
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"Our analysis suggests that at the time of the iPhone X launch there will be an installed base of ~330 million users on an iPhone that's at least 2 years old," Olson wrote in a note to clients on Tuesday. "We believe a sizable portion of these users, in addition to users with new devices, will look to upgrade to the age of their device and the more significant changes to the device."
Apple's sizable installed base is a major driver behind what's poised to be a "significant" iPhone 8 cycle, said Bernstein analyst Toni Sacconaghi, who estimates that the company could see upgrade rates between 27% and 30% among existing iPhone users compared to 36% during the iPhone 6 cycle. Apple's stock has traditionally had mixed performance following product launches, but Sacconaghi believes Apple could continue to ride recent highs after Tuesday's event.
Sacconaghi gave three reasons for why Apple's stock could head higher, saying consensus estimates for the iPhone's average selling price and unit sales remain too conservative, the stock trades "comfortably below" its peak multiple during the last iPhone super-cycle and it could be helped by potential contributions from currency tailwinds as well as product updates to the Apple Watch and HomePod.
"We note that a high [iPhone] price could potentially add up to 70 cents to our fiscal year 2018 EPS estimate of $11.05, which is already above consensus," Sacconaghi said.
R.W. Baird analyst William Power said the Apple Watch and AirPods contribute to the "iPhone as a platform" notion, which argues that iPhone has evolved into being more than just a smartphone and more of an ecosystem of products and services. Power estimates that the Apple Watch generates more than three-times the revenue of its nearest competitor, China's Xiaomi, which just passed Apple as the world's top wearable maker. On top of that, a recent report from NPD showed that AirPods have accounted for 85% of wireless headphone sales in the U.S. year to date.
"Despite being panned by many, Apple Watch and AirPods appear to be dominating their respective categories," Power wrote in a note to clients on Tuesday. "Of course the iPhone remains the dominant revenue and profit driver, but the broader iPhone platform is also critical to sustaining its leadership position."