Analysts at Nomura Instinet 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.
But Apple’s iOS subscriber base — the number of people using an Apple product — is expected to be 45-50% larger than it was in 2014, according to Nomura Instinet.
This next supercycle “seems well underappreciated,” analysts Jeffrey Kvaal and Gregory McNiff wrote. Their forecast is higher than the consensus of their peers:
“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,” they wrote. 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 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 with notably superior specs, according to KGI Securities analyst Ming-Chi Kuo.