As usual, everyone's talking about the rumored new iPhone. The wrinkle? They're not talking about the very next model, the iPhone 7 due out in September, but instead are looking out a distant 15 months or so ahead -- a lifetime in the tech world -- at the following iPhone.
Next year's iPhone 8 is shaping up to be the most exciting smartphone release from Apple (AAPL) since the original iPhone in 2007.
And for Apple that's good -- and bad.
The buzz around the 2017 model iPhone is so great that it threatens to put a damper on sales of this year's model, analysts say. The iPhone 8 has been written about extensively in the tech and mainstream media, with journalists and analysts getting their information from leaks in the supply chain.
"As more and more is written about the iPhone 8, the average consumer will start to become aware of what's coming from Apple," Canaccord Genuity analyst Mike Walkley told IBD.
People who have paid off their current iPhones "might wait one more year for what they think is going to be a bigger release," timed with the 10-year anniversary of the first iPhone, Walkley said. "Certainly everything in the supply chain points to next year having a much more differentiated device than this next one."
Apple observers expect the iPhone 7 will be a relatively minor upgrade to the current iPhone 6S series handsets. The 7 is expected to be thinner, faster and have a better camera, but nothing too earthshaking is seen. It will look pretty much like any iPhone from the past couple of years.
By contrast, the iPhone 8 could sport a radical redesign thanks to its use of an organic light-emitting diode (OLED) screen, instead of the current LCD screen.
The iPhone 8 could make Apple's smartphone sexy again and prompt long lines to form outside Apple retail stores, like in the good old days.
But rumors about the 8, which will be the 11th-generation iPhone, could inspire people to extend the life of their existing handsets and wait to upgrade, Wall Street analysts say. That could lead to soft sales of this fall's 10th-generation handset, the iPhone 7. And those soft sales would be on top of weaker-than-expected sales of the current iPhone 6S.
One huge factor could alleviate much of this concern, though -- the way service providers are altering their business models.
New Year, New iPhone Could Be The Norm
Apple and its carrier partners such as AT&T (T) and Verizon Communications (VZ) probably will use the iPhone 7 launch to promote upgrade plans that let customers get new iPhones every year, says Tim Bajarin, an analyst with Creative Strategies and a longtime Apple watcher.
"More and more people are going to move to that, because everybody knows that Apple does a better phone every year," he said.
Most of the excitement over the iPhone 8 concerns its rumored use of an edgeless OLED screen. OLED displays boast richer colors, deeper blacks and a faster refresh rate than LCD screens. Since OLED screens don't have a backlight, they can be much thinner and more power efficient. Plus, OLED displays are flexible, allowing them to be used on curved screens.
Mock-ups of possible iPhone 8 designs circulated by tech enthusiast websites illustrate dramatic new form factors for the device. From iPhones with secondary screens along their sides to all-glass handsets in which the display covers the entire surface of the phone, front and back.
For years, Apple Chief Design Officer Jony Ive has expressed a desire for the iPhone to appear like a single sheet of glass, the Wall Street Journal reported recently.
But don't put a lot of stock into those artists' conceptions of the iPhone 8, Bajarin says.
"The kinds of designs you're seeing now are more pie-in-the-sky than reality," he said.
The iPhone 8 could be so fresh-looking that it could cause new-model envy among current iPhone users, something that hasn't happened since Apple moved to larger screen sizes in 2014.
Would OLED Be A Standard Or Premium Feature?
One big question is whether Apple will limit the OLED-screen iPhone 8 to a premium model and keep selling LCD models as well.
Another is whether any use of a curved display or wraparound screen will be truly useful or perceived as a gimmick.
Apple's OLED iPhone wouldn't be the first such smartphone on the market. Samsung already uses OLED displays in its flagship Galaxy smartphones. Samsung itself, in fact, is the top maker of OLED displays, including for its TV sets, and Apple likely would have to buy its OLED screens from Samsung until other vendors could ramp up production.
Sharp, Japan Display, Joled, AU Optronics (AUO) and LG Display (LPL) all plan to add either pilot or production capacity for OLED screens in 2017 or 2018. Plus, at least five Chinese companies are preparing OLED production lines.
Apple enthusiasts, however, will think the OLED iPhone is a "big deal," even though Samsung and others already use them, says Roger Kay, an analyst with Endpoint Technologies Associates and another longtime Apple watcher.
Roughly 10% of smartphones use OLED displays today, and that figure could reach 100% after 2020, Goldman Sachs said in a May 23 research report.
But the OLED screen could be just one selling point of the iPhone 8. Another major change is that next year's iPhone could feature wireless charging, according to media reports. Instead of plugging in a power cord, users would place the device on a charging mat. Again, Samsung and some others, such as Motorola, already offer such a feature, but it would be another big change for the iPhone.
In addition, Apple also could eliminate the physical home button with the iPhone 8. That functionality would be incorporated into the pressure-sensitive touch screen. Removing the home button would allow the display to cover more of the iPhone's front panel.
For the iPhone 7, Apple is expected to eliminate the audio jack, forcing users to switch to a Bluetooth headset or a Lightning-connected headset. A rumor circulating at the Computex Taipei 2016 trade show claims that, with the iPhone 7, Apple plans to bundle a Lightning adapter with its standard EarPods headphones.
With the removal of the audio jack in the iPhone 7 and wireless charging in the iPhone 8, Apple could then offer a smartphone with no holes to plug in chargers and cables. The device could be completely wire free and rely on the internet cloud for data backup.
Apple shares fell 2.8% on the stock market today as Brexit fears hit worldwide.
