If there is a downside to having the best quarter you’ve ever had is that investors customers expect you to do it again next time, except even bigger. That’s the bad news—good news scenario Apple’s Tim Cook is dealing with right now.
For now Cook take satisfaction that Apple's sales are growing again. In the 2016 fourth quarter that ended on Dec. 31, Apple’s revenue hit $78.4 Billion, which topped analyst expectations.
Of that amount, 64 percent was from international sales, which is critically important for Apple. With the U.S. and Western Europe smartphone markets being close to saturated, Apple needs new markets, and the company has apparently found them.
The challenge for the company is how to keep finding new customers even in saturated markets. The only real answer to that is to give potential customers a reason to buy a new phone. But to do that phone has to enough improved features to convince customers with older iPhones to spend on a new model.
However the latest iPhones are really good devices. They’re good enough that the company sold more iPhones than ever before, according to Cook’s statement in Apple's earnings report. So what is Apple going to do to make the next iPhone good enough to convince current owners to drop nearly a thousand dollars on a new phone?
Unfortunately for Apple, Samsung and other Android smartphone designers have also worked hard to improve their handsets, with amazing new screens, features that extend the platforms of these new devices far beyond their function as mobile phones to the point where today's smartphones are really mobile computing devices that can also make phone calls.
So what does Apple have in mind to make the iPhone 8 the next big smartphone hit? Sadly, if the rumor mill is correct, not as much as you might hope. There have been enough leaks of alleged iPhone photos to indicate that the new phone will have a larger screen, but in the same size chassis as the iPhone 7.
Most of the photos appear to show an edge to edge screen with very little bezel. The rumors also indicate that Apple will move to an OLED screen and away from the LCD screen that Apple’s been using for years. But if an edge to edge OLED (organic LED) screen sounds familiar, that's because Samsung sells smartphones today with those screens.
Of course, Apple can confidently assert that so far it hasn't had a problem with iPhone batteries randomly overheating or exploding. Other features that seem to be in the works include wireless inductive charging so that your phone would only have to be near a charger to work. Apple has also filed for several patents lately that appear to be supporting technology for facial recognition, which would either replace or supplement its fingerprint reader.
The fingerprint reader is also in for a change, although not as much as a change as some observers might suggest. By moving to a design with little or no bezels, there’s no room for the home button with its integrated fingerprint reader.
But with the iPhone 7 there’s no longer a physical button anyway. There’s just a depression in the glass face of the iPhone that has a fingerprint reader behind it, which delivers a simulated click when you press it.
The only significant difference with the iPhone 8 would be the elimination of the depressed area in the face, which doesn’t actually need to be there. Instead, the fingerprint reader would be behind the screen in a specified location when you need it. Presumably the simulated click would remain.
Is that enough? The next iPhone is sure to have a more powerful processor, because new iPhone models have always included more powerful processors. But even if it’s the long-rumored A11 chip with its 10-nanometer design that may not be the sort of feature customers get excited about. Of course if it the new iPhone includes the new 10 nm processor it should be faster and more efficient, which could mean longer battery life. Or it could mean a smaller battery and the same battery life.
The new iPhone could also have a significantly better camera than what’s on the iPhone 7, perhaps giving the standard iPhone the same camera as the dual-camera setup that’s on the 7 Plus. But taken together, is that enough?
Probably not. So this means one of two things. Either Apple has something much bigger up its sleeve that it’s managing to keep secret from the legions of phone spies around the world that is different and exciting enough to seriously boost iPhone sales.
If it doesn’t, it’s hard to see how Apple will stay on the sales escalator for next year.