Amid talk of 'peak iPhone', Apple's prospects hinge on next model

Wed Apr 27, 2016 6:20pm EDT
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By Supantha Mukherjee and Tenzin Pema

(Reuters) - Ask Siri if iPhone 7 will be the answer to Apple Inc's (AAPL.O: Quote) problems, and you're told that a visit to Apple's website should answer that question "and more".

If only it was that easy.

Apple's shares closed down 6.3 percent at $97.82 on Wednesday, wiping off about $36 billion in market value, a day after the company reported its first-ever fall in smartphone sales, arousing talk of "peak iPhone".

For many analysts, the company's immediate future rests with iPhone 7, which Apple is expected to launch in September.

"If iPhone 7 doesn't surprise with meaningful new useful features, we worry that consumers won't upgrade," Macquarie analyst Ben Schachter wrote in a note to clients.

"And unfortunately, nothing that we've seen about iPhone 7 thus far strikes us as particularly innovative," said Schachter, who cut his price target to $112 from $117 while maintaining his "outperform" rating on the stock.

The iPhone 7 is expected to sport a new look with features such as waterproofing, wireless headphones and force touch as the home button.

But many wonder if that will be enough to entice users to dump their existing iPhones or switch from the Android-based phones that have come to dominate the smartphone market.   Continued...

Details are pictured on the back of an Apple Iphone 6 on a table in a restaurant in Hanau, Germany, April 10, 2016.    REUTERS/Kai Pfaffenbach/File Photo