Apple (NASDAQ: AAPL) will make only minor modifications to the iPhone models expected to be released this fall, waiting until next year to release a version with more substantial design changes, according to a Wall Street Journal report.
Citing unnamed "people familiar with the matter," the Journal said the next iPhone – which is highly likely to be branded the iPhone 7 – will be available with the 4.7-inch and 5.5-inch displays that were first introduced in 2014. Apple will remove the headphone plug in the next version, creating a thinner, more water-resistant handset, according to the report.
The 2017 version could include an edge-to-edge OLED screen and might not have a home button but feature a fingerprint sensor built into the display. Nikkei reported this week that Samsung plans to ramp up production of OLED displays by more than 50 percent to meet demand from Apple and other vendors, with "a partial 2017 release" of an iPhone with an OLED display now anticipated.
The reported strategy would be something of a departure for Apple, which has generally made substantial design changes to its flagship phone every two years. The company enjoyed success in 2014 when it introduced the larger displays, joining a worldwide movement toward bigger phones.
Regardless, a hit new iPhone would provide a big lift for Apple, which has suffered as growth of the smartphone market has slowed, particularly in the mature markets where the iPhone has thrived. Analysts expected iPhone sales to fall for the first time during the first quarter of 2016, and Morgan Stanley's Katy Huberty predicted in December that sales of the iconic handset will shrink by 3 percent this year.
Consumer Intelligence Research Partners said in April that the iPhone 6s and 6s Plus weren't selling as well relative to other Apple models as their predecessors did. And Localytics said in April that the iPhone SE, which sports a smaller screen and is aimed at the middle of the smartphone market rather than the high end, saw the lowest adoption in its first weekend of availability of any Apple handset since 2012. Demand for the device "could grow steadily," though, Localytics said.
Analysts blame several factors for the worldwide slowdown in smartphone sales, including extended phone replacement cycles, high penetration rates and a lack of compelling new features. Apple's smartphone business is still extremely profitable, but the company may cede market share over the next year if the next iPhone is seen as less innovative and sophisticated than other new smartphones.
- read this Wall Street Journal report
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