Apple’s Stock Is Down Because People Are Waiting for the iPhone 8


People L-O-V-E buying Apple products, and not just in America. The Cupertino-based company ($AAPL) routinely posts an eleven-digit quarterly revenue from sales all over the world, including India and China. While MacBooks and iPads aren’t the company’s leading products (though they do sell a lot), sales of the iPhone and related accessories continuously help the company rake in billions.

In the last year, competitors like Google and Samsung aggressively courted Apple’s iPhone fanatics with new and previously unseen features. The most recent Samsung Galaxy phone, for instance, came with a bezel-free screen, giving the front of the flagship phone a seamless look. Google’s Pixel phone, released shortly after the latest iPhone, touted a camera that was better than anything Apple had on the market. These options haven’t converted a large percentage of customers (yet), but still provided a challenge to Apple, who made minor tweaks and removed the headphone jack in their iPhone 7.

At first, Apple reported stronger-than-expected sales of the iPhone 7, giving investors cause for a celebration and sending their stock price to new highs. Yet when the company announced their quarterly earnings yesterday, they revealed something quite troubling: despite all the excitement and hubbub about the iPhone 7, the phone’s sales in the last three months missed analyst expectations — and for good reason.

People are waiting on the iPhone 8.

The iPhone 7 looks quite a bit like the iPhone 6S, which looks like the iPhone 6. These devices have a few key differences between them, but not much to get every iPhone owner to buy a new phone after a year or two. The much-rumored iPhone 8 is expected to bring exciting features like wireless charging, a bezel-less OLED screen (like the Galaxy S8), a camera built into the screen, and countless other features. Until that happens, consumers are less incentivized to pick up a device with last year’s look and features, among a few improvements. This is why the company sold 50.75 million iPhones, compared to the 52.27 million units expected by analysts.

The iPhone 8 might not come out until late this year (or next year).

Apple normally releases a new phone every September. Investors rely on the company’s timely yearly release, as such a major product release greatly helps their fourth quarter earnings and the company’s stock. Consumers often wait for a September iPhone release to decide whether they’ll purchase a new device, hence the slowdown in the company’s last quarter.

This year, Apple might not make the September timeline for the next iPhone’s release. They might not even release a new device in 2017. According to Deutsche Bank (as reported by Business Insider), the company is having manufacturing and component-sourcing troubles for a high-end iPhone 8 device. While an incremental update to the current device will allegedly be available by the fall, a completely revamped iPhone 8 with groundbreaking new features could be delayed until next year.

Keep in mind that these are just rumors. Apple hasn’t come forward with news of delays, nor would they before announcing a new product. If these rumors prove to be true, you could expect to see iPhone sales continue to slip until the new device goes on sale.

Should you invest in Apple stock?

Despite taking a bit of a tumble this morning, $AAPL is up by 25.41% since the beginning of the year. The company’s market cap is higher than it’s ever been, and they could soon become a trillion-dollar company. Their sales will likely increase when the inevitable new iPhone drops, regardless of the features it may or may not include. If you think Apple’s stock will continue to grow despite possible delays and setbacks, be sure to do your research before you invest. If you think the dip in Apple sales are a sign of worse things to come, you might want to sit this one out.