iPhone 8 sales could disappoint, dragging down smartphone market, analysts say

iPhone 7
Apple's next iPhone could face some significant challenges. Image: Apple

Analysts at Deutsche Bank predicted that sales of Apple’s next iPhone are likely to fall well short of expectations. And that could weigh down a worldwide smartphone market that appears to be gaining some modest momentum.

The iPhone 8, as the gadget will almost surely be branded, is widely expected to feature a radical new design, updated OLED display, wireless charging and a vertically aligned dual camera. Such updates would represent the first major changes to the device since Apple released the redesigned iPhone 6 in 2014.

But BayStreet Research recently predicted that, partly due to the rumored delay in the new iPhone’s availability, U.S. iPhone sales will fall roughly 10% in the third quarter of this year when compared with the third quarter of last year. And Apple faces some significant challenges beyond a potential delay, noted, according to a Business Insider report: Sizable mature markets have reached smartphone saturation; upgrade cycles have lengthened significantly; competition in China has become cutthroat and demand is increasing for refurbished handsets.

“We believe investors will be disappointed by iPhone growth in FY-18 and FY-19,” the analysts wrote in a note to investors, according to Business Intelligence.

Disappointing sales of Apple’s next flagship phone could become a significant speed bump for a smartphone market that appears to be gaining modest momentum. Gartner recently predicted smartphone shipments will grow 5% this year, reaching nearly 1.6 billion units.

But with the next iPhone sure to be the highest-profile new handset in the second half of the year, a weak performance could resonate throughout the market.

“The Samsung S8 and S8 Plus have had a strong impact so far in 2017, with users undeterred by battery issues that affected the Note 7 at the end of 2016. This good start points to a rebound for Samsung,” Gartner Research Director Roberta Cozza said in an announcement last week. “Continued premium smartphone growth in 2017 will also be highly dependent on the forthcoming anniversary edition of Apple’s iPhone, which should bring more-drastic feature and design upgrades than the last few iterations. Recent announcements from Apple indicate that some new technologies and functionalities may also appear in the next iPhone in areas like augmented reality and improved machine learning.”