April Webinar RegistrationApril Webinar Registration


Apple 2018 Predictions: Jumbo iPhones, Streaming Video Service

The year ahead for Apple (AAPL) could bring a lineup of jumbo-sized iPhones and an internet television service, Wall Street and technology analysts speculate.

Apple kicked off what many expect to be a major iPhone upgrade cycle with the Nov. 3 release of the iPhone X. The new flagship smartphone is Apple's biggest iPhone redesign in three years. The device features a 5.8-inch OLED display, a facial recognition security feature, wireless charging, augmented reality capabilities and other enhancements.

Apple hopes to keep the momentum going with its 12th-generation smartphones, scheduled for release in fall 2018.

Respected Apple analyst Ming-Chi Kuo of KGI Securities thinks the 2018 iPhone lineup will include three handsets with screen sizes as big as or bigger than the iPhone X, which has the largest iPhone display to date.

Kuo believes Apple will come out with a refreshed 5.8-inch OLED model and a premium 6.5-inch OLED iPhone, plus a 6.1-inch LCD handset. Analysts with investment bank Nomura are predicting the same lineup.

The new OLED iPhones will be pitched to high-end smartphone customers, while the new LCD iPhone will be positioned as a mid-range device, Kuo said. Apple also plans to refresh its entry-level iPhone SE early in 2018, he said.

What the new iPhones will be called is the subject of much debate. Apple complicated its naming scheme with the fall 2017 release of the iPhone 8 series and the 10th-anniversary iPhone X, pronounced "ten" as in the Roman numeral. It skipped the number nine in its naming system.

The new iPhones likely will include high-speed antenna modules for gigabit LTE connectivity, Kuo said. That's an area where Apple has lagged rivals in adoption of the latest standards. Kuo predicts that 70% to 80% of the new baseband processors will come from Intel (INTC) because Apple is embroiled in a legal fight with wireless-chip leader Qualcomm (QCOM) over patent royalty rates and terms.


IBD'S TAKE: For a roundup of 2018 predictions for the stock market, visit the IBD page "2018 Stock Market Outlook: What To Watch For In The New Year."


The iPhone business is vitally important to Apple. Sales of iPhone handsets alone accounted for 62% of Apple's revenue in its fiscal year ended Sept. 30. Plus, some of Apple's accessories and services businesses are directly tied to the iPhone.

The big question Apple must answer in the New Year is whether the iPhone X and iPhone 8 series phones have sparked a "supercycle" of upgrades or not, GBH Insights analyst Daniel Ives told Investor's Business Daily.

Apple will have to outsell the 231 million units the iPhone 6 series sold to be considered a success, he said.

"If it's anything north of 240 million, I would characterize it as a supercycle," he said. "The next few quarters are huge 'prove me' quarters for Apple to show that there's still mojo on the smartphone side."

Apple's competitors in the smartphone business aren't about to roll over. Samsung is expected to release its Galaxy S9 smartphones in March. And Chinese handset makers are giving Apple headaches in China, the world's largest mobile phone market. Plus, Chinese smartphone makers Huawei and Xiaomi are reportedly in talks with U.S. wireless operators, including AT&T (T) and Verizon (VZ), about selling their smartphones to American consumers as soon as 2018.

In early 2018, Apple is expected to release its premium voice-activated wireless music speaker HomePod. The $349 device was supposed to be out in the holiday shopping season, but Apple delayed the launch in November to fine-tune the product.

It will compete with wireless speakers with voice-response technology such as the Amazon (AMZN) Echo speakers and Alphabet's (GOOGL) Google Home.

Smart speakers are seen as a foot in the door to sell consumers more smart home technologies, such as connected thermostats and lighting, which people can control with voice commands.

Meanwhile, Apple's next-generation Apple Watch could include an advanced heart-monitoring feature, making the wearable a serious medical device. Apple wants to add an electrocardiogram sensor to the smartwatch to spot cardiac problems, Bloomberg reported.

Apple's fastest growing business is its services division, which includes such things as Apple Music, iCloud, Apple Pay and the App Store.

Some research firms such as CCS Insight think Apple will launch a subscription video-on-demand service next year to take on Netflix (NFLX), Amazon and others in the fast-growing sector.

Apple has hired some major Hollywood executives to buy original television series for the new service.

Among the shows it has reportedly secured are a reboot of the 1980s anthology series "Amazing Stories" from producer Steven Spielberg; a drama about a TV morning news show starring Jennifer Aniston and Reese Witherspoon; and a new space-themed drama series from Ronald Moore, a writer and show runner known for his work on "Star Trek: The Next Generation," as well his mid-2000s revival of the "Battlestar Galactica" series.

Apple management has revealed little about its video efforts, other than to say the company is exploring the market and seeing where it leads.

RELATED:

Apple To Launch Netflix Rival In 2018, Research Firm Predicts

Apple HomePod Speaker Delayed, Will Miss Holiday Shopping Season

Apple Could Reach $1 Trillion Market Cap In 2018, Analyst Says