During the announcement of its third quarter results, Apple was bullish on the company's fourth quarter sales, leading many Wall Street analysts to believe that the highly-anticipated iPhone 8 could go on sale in limited quantities before the end of the September quarter. Some analysts, however, are not linking Apple's rosy Q4 guidance to the iPhone 8 launch, but rather expecting the rumoured iPhone 7s series to drive sales.
Apple, which reported quarterly revenue of $45.4 billion and sold 41 million iPhones in the April-June quarter, expects revenue between $49 billion and $52 billion for the fourth quarter of this year. The forecast is noticeably higher than the $46.9 billion Apple earned in revenue in the same period last year.
Reacting to the Q4 sales forecast, many analysts have offered their responses and adjusted their price targets on Apple's shares accordingly. However, the debate over the launch of the iPhone 8 still remains unsettled as some industry watchers believe the 10th anniversary iPhone could still be late to market.
No iPhone 8 delay?
According to Amit Daryanani, a research analyst at RBC Capital Markets, the fourth quarter guidance "effectively implies no iPhone launch delay." Daryanani said the forecast indicates 12 percent sequential growth compared to a five-year average growth of 7 percent, suggesting that either higher volumes or higher average selling prices will make this year's iPhone launch "much more material."
Rob Cihra, a research analyst at Guggenheim Partners, said Apple's Q4 guidance implies that the iPhone 7s and iPhone 7s Plus will launch in the quarter while there are also possibilities of some initial iPhone 8 sales during the same time.
BMO Capital Markets analyst Tim Long reportedly said Apple's outlook indicates the company might be shipping a "premium iPhone Pro" and the refreshed iPhone 7s models in September, "though initial volumes are likely to be extremely constrained."
iPhone 7s series will be there for a reason
Like everyone else, JPMorgan analyst Rod Hall was also encouraged by Apple's fourth quarter estimates, and increased his price target from $165 to $176. However, he put his money on the upcoming iPhone 7s and iPhone 7s Plus as he believe Apple's optimistic outlook is due to these two LCD-display smartphones.
According to Hall, the upgraded versions of the current iPhone 7 series will ship in September while the OLED-screen iPhone 8 will ship in the December quarter, which starts on October 1.
In a recent note, Hall said the iPhone 8 would arrive on time, but would be initially available in limited quantities. He had also said Apple would produce close to two million iPhone 8 units for sale before the end of September due to production constraints.
UBS analyst Steven Milunovich, meanwhile, said the iPhone 7s models could be launched during the fourth quarter while Apple might just announce the iPhone 8 in September.
"We doubt the OLED model will be available, but our sources suggest a quick ramp in the December period," Milunovich said, suggesting that Apple could launch the iPhone 8 in early October.
Regardless of the debate over the iPhone 8 launch, Apple is most likely to release three iPhones this year.
The iPhone 7s and 7s Plus models will conservative upgrades over the existing iPhone 7 and iPhone 7 Plus. The premium iPhone 8, on the other hand, will incorporate many new features including an OLED screen, a new physical design, slightly curved glass, wireless charging, 3D sensors and many more.
