Apple iPhone 7 Gets More Important

By Douglas A. McIntyre Published Jul 22, 6:31AM EDT

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Presumably, Apple Inc. (NASDAQ: AAPL) will follow its normal release schedule for iPhones and launch a new version in September. While the company may call the smartphone the iPhone 6s, if Apple adds enough features, it will be the equivalent of an all-new iPhone. Whether or not it is called the iPhone 7, the new product will be the most critical contributor to the recovery of Apple’s shares, which were beaten down after earnings disappointed Wall Street.

To some extent, the anxiety about Apple’s finances was overblown. The company did post revenue of $49.6 billion and net income of $10.7 billion, compared to $37.7 billion and $7.7 billion in the same quarter last year. Apple did sell 47.5 million iPhones. Carefully watched revenue growth in Greater China was up 112% to $13.2 billion. However, forecasts for the current quarter where light, against many analysts’ forecasts.

If revenue growth mostly relies on sales of the iPhone, and the iPhone 6 is at the end of its highest demand life cycle, the iPhone 7 release has to be a blockbuster. The iPhone 6 posted sales of 10 million during the first weekend it was available. To impress investors, that numbers for the new iPhone better be closer to 12 million or 13 million. Otherwise, Apple can be criticized for a slowdown in demand for its major product line.

So, the future of Apple’s share price will have a foundation in just a few days of sales, those that run from the day of release of the iPhone 7 and the two or three days of performance right afterward. Apple cannot otherwise prove that it does need a new high-demand product, just as it did when the iPhone replaced the iPod in 2007. Eight years later, Apple has to answer for what happened in 2007. One product was dying, and another wildly successful one took its place.

If the iPhone 7 does not draw crazy high numbers of sales, Apple’s engine will have stalled, which is something it has not done in the short history of the smartphone market.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.