Apr 26, 2018

AppleInsider Apple looking to simplify iPhone branding for 2018 releases, analyst predicts

AppleInsider

Apple looking to simplify iPhone branding for 2018 releases, analyst predicts



Apple could make a major change to the way it names successive iPhone generations this year, Guggenheim analyst Robert Cihra suggests, tipping Apple to take the opportunity to simplify what the iPhones are called when the new models launch this fall.
iPhone X rear camera



The change in numbering for last year's models compared to previous iterations of the iPhone, resulting in the skipping of the "iPhone 7s" name in favor of the iPhone 8 and the introduction of the iPhone X, may lead to "potentially simpler branding" for the popular smartphones, Cihra writes in an investor note received by AppleInsider.

"We think Apple may use this upcoming cycle to formally change its iPhone naming/branding pattern," according to the analyst, with the "mid-market LCD-based iPhone" simply called "iPhone" without any numbering. The high-end iPhone for the generation will apparently keep the "X" suffix to denote its increased specifications.

Making a change to the way it names its successive product releases is not a new idea, as evidenced by the main iPad line. The range moved from the iPad name to iPad 2 then back to The New iPad, then switching to the iPad Air name by the fifth generation, before returning to being simply called iPad.

A switch to simplify the name to iPhone and retaining the X branding could also be confusing to consumers down the line, as it could become harder to refer to specific models without some sort of identifying term.

Highlighting the lack of a "plus-sized" iPhone X last year, caused through a limited supply of OLED panels, the firm believes the existence of a 6.5-inch model in the upcoming refresh can remedy what is considered a "notable miss." There are also the "makings of a solid refresh" for the LCD-equipped model, with features carried over from the iPhone X including 3D sensing and more native optimization of on-device machine learning and augmented reality likely to help its cause.

Current rumors and speculation point to three iPhones shipping this fall, with a lower-specification 6.1-inch LCD model accompanied by 5.8-inch and 6.5-inch OLED versions.

For the current iPhone generation, Guggenheim has lowered its annual iPhone unit growth forecast from 3 percent year-on-year to flat, citing "softer-than-expected iPhone X uptake" and broadly weaker smartphone market demand in China. "It appears Apple ultimately cannot outgrow what is now a no-growth smartphone market," writes Cihra.

The expected iPhone average selling price (ASP) increase of 15 percent year-over-year is thought to help continue driving iPhone revenues up year-on-year by 14 percent.

Ahead of Apple's second quarter results, due for release on May 1, Guggenheim expects in-line results with no changes to its estimates, including revenue growth of 15 percent year-on-year to $60.9 billion, and earnings per share of $2.69, up 28 percent on last year.

Estimates for the June quarter, however, have been trimmed, with expected revenue down from $52.7 billion to $49.4 billion and EPS dropping from $2.15 to $1.93. Shipments of iPhones in that quarter are also thought to go down from the previous expectation of 42.7 million to 39.4 million.

Guggenheim continues to maintain a "buy" rating for AAPL stock, with the 12-month price target unchanged at $215.