With attention focused on the upcoming 10th anniversary of the iPhone and a new model, currently expected to be released this coming fall, some analysts and observers are suggesting that Apple Inc.’s (NASDAQ:AAPLC) signature smartphone may soon go the way of the Dodo bird.
For starters there are already rumors of problems getting the phone to market in a timely fashion.
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iPhone Release Issues
Among the issues being mentioned, a shortage of key components, i.e., Organic Light Emitting Diode (OLED) displays and a selling price rumored to come in north of $1,000. Apple fanatics are used to paying more for Apple products but a smartphone that costs as much as a MacBook might be a bit of a stretch.
Another reported issue has been technical problems getting the scanner to work under the display glass on the new design. These things could add up to a production bottleneck pushing back release of the new device.
Wall Street Responds
The street is taking a long-term view. Up to 9 analysts over the past month or so have lowered their projections for iPhone sales for the current fiscal year which ends in September. Most of them have, instead, shifted to next year. This has resulted in expectations for iPhone sales growth of about 2% for this year and as much as 13% for fiscal 2018, according to FactSet.
The result of Wall Street taking a long-term view is that Apple’s forecast for the September quarter – expected around Aug. 1 – may not even include the new iPhone as part of the company’s report.
Smartphones Will Eventually Go Away
More than one industry observer has started predicting the demise of smartphones – not just for Apple but for others in the space including Samsung. Some, among them the afore-mentioned Apple along with Alphabet Inc.’s (NASDAQ:GOOGC) Google, Microsoft Inc. (NASDAQ:MSFTA), Facebook Inc. (NASDAQ:FBB) and Amazon.com Inc. (NASDAQ:AMZNC) are said to be trying to kill off the smartphone ahead of schedule.
For companies like Amazon, Microsoft and Facebook incentive may center around the fact they do not own a mobile platform like both Google and Apple. Killing off smartphones would end the monopoly enjoyed by those two companies and even the playing field for a new product line.
As to what will replace smartphones, many see the growth of augmented reality (AR) as the platform on which much new technology will be based. AR which superimposes digital images onto the real world, is expected to be the technology of the future and all the mentioned companies are racing to be a dominant force.
When PCs became essential as opposed to a fad, Apple and Microsoft were there to take advantage. Replacing smartphones with augmented reality in which images float in front of your eyes is obviously an area major corporations and startups alike want to dominate in the future.
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Apple’s ARkit, a system for building augmented reality into iPhone apps, has a jump-start on the technology required to make AR viable. It’s already proven to be technologically robust and easy to use. Observers note than if and when Apple releases smart glasses, apps will follow quickly.
Not that there isn’t potential competition. Google’s Project Tango is an AR effort already in the works. Microsoft has HoloLens goggles which project 3D images into your field of view. All of this leads to speculation that Apple may be leading the charge to kill off its own iPhone line to shift customers over to the new upcoming AR revolution.