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Apple's iPhone 8 to Drive 9.1% Increase in Shipments Per IDC

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Per the latest report from research firm, IDC, Apple Inc’s (AAPL - Free Report) much awaited iPhone 8 will result in a major upgrade cycle in 2018.

Per the report, Apple will see a 9.1% rise in iPhone shipments next year driven by iPhone 8, iPhone 7S and 7S Plus. Though iPhone 8 is slated for release this year, the majority of shipments are “likely to land early in 2018” according to IDC.

Talking about the overall smartphone market, IDC stated that shipments will increase over 1.7 billion in 2021 from 1.47 billion at the end of 2016. The five-year CAGR will be around 3.3% driven by new users as well as the standard two-year replacement cycle. IDC estimates that the smartphone market has ample room to grow as about 50% of the world’s population has not started using smartphones yet.

More importantly, average selling price of premium devices (with large screens) will increase 9% by 2021 driven by high-end mobile phones like iPhone 8, Note 8, V30 and more.

However, over the long term, IDC states that composition of the operating systems’ market share is unlikely to change. iOS will continue to have 14%-15% share, much less than Alphabet’s (GOOGL - Free Report) Android platform, which holds 85% share. But despite the relatively low market share, Apple will command 36% of the device market in dollar terms (equaling $180 million), representing “over half the combined value of all Android OEMs combined”, adds IDC.

As for 2017, iPhone shipments are expected to increase 1.5% against 7% decline registered in 2016.

In the past few days, there has been strong speculation that Apple will host its product announcement event on Sep 12. Apple usually holds a big event in September to reveal its latest offerings, which start retailing a week after the event.

Reportedly, at this year’s event, Apple will be announcing three new phones. iPhone 7S and iPhone 7S Plus are updates to its iPhone 7 and 7 Plus editions unveiled last year. In addition to these, a mega edition, dubbed as iPhone 8, will likely be introduced to the world, per reports.

For some time now, Apple’s mega edition phone has caught the fancy of one and all. Apple is likely to make a big innovation leap with iPhone 8. The phone is rumored to have features like a glass body, a dual curved edge-to-edge OLED (organic light-emsitting diode) display with wireless charging (USB-C) and higher storage options. The camera is likely to be far better than its predecessors.

Zacks Rank and Share Price Movement

At present, Apple carries a Zacks Rank #3 (Hold).

Notably, the company has outperformed the industry in a year. Shares of Apple have surged 53.5% compared with the industry’s 51.9% increase.

Stocks to Consider

Some better-ranked stocks in the broader tech space include Garmin Ltd. (GRMN - Free Report) and The Trade Desk, Inc. (TTD - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Garmin and Trade Desk have delivered average positive earnings surprise of 22.89% and 483.79%, respectively in the trailing four quarters.

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