NOMURA: iPhone 8 is going to blow iPhone 6 out of the water

Advertisement

Tim Cook

REUTERS/Robert Galbraith

Apple CEO Tim Cook.

Advertisement

Analysts at Nomura estimate that a "supercycle" will develop in the last three months of 2017 that will make iPhone 8 a much, much bigger product than iPhone 6.

iPhone 6, launched in 2014, was an era-defining product for Apple that propelled the company to record sales.

Complimentary Tech Event
Transform talent with learning that works
Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More

But now, Apple's current iOS subscriber base (the number of people using an Apple product) is 45-50% larger than it was in 2014.

This next supercycle "seems well underappreciated," analysts Jeffrey Kvaal and Gregory McNiff say. Their forecast is higher than the consensus of their peers:

Advertisement

"Consensus calls for 80 million iPhones in F1Q18 (Dec '17) ... only modestly above the iPhone 6 supercycle (75 million). However, we estimate the iPhone 8 will launch into an iOS subscriber base 45-50% larger than the iPhone 6 did and model 86 million iPhones in F1Q18 (from 83 million)."

The increase in subscribers has been driven by sales of the iPhone 6, the analysts say: "We believe the iPhone 6 drove the iOS base up ~35%, followed by 5-10% increases from the subsequent devices." Anyone who is still using an iPhone 6 is a prime candidate for buying a new iPhone in late 2017.

The possibility that the upcoming iPhone could tap into a large base of people who are waiting to upgrade has been floated by several analysts before as a rationale for being bullish on Apple.

The iPhone 8, codenamed "Ferrari" according to leaked manufacturing documents, is expected to include a new kind of OLED (organic light-emitting diode display) screen already used by Samsung, which would allow the phone to have a borderless, all-display front surface.

This OLED model may trigger replacement demand among high-end users, especially if it comes in an all-new-design form-factor with notably superior specs, according to KGI Securities analyst Ming-Chi Kuo.

Advertisement

Other rumoured features the document mentions include a "glass-sandwich" design (glass at the front and back of the phone), an "invisible" home button, and wireless charging.

NOW WATCH: An exercise scientist explains what everyone gets wrong about stretching