iPhone 7 Rumors: Apple to Drop Standard Headphone Jack (AAPL)

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If you’re in the know, you might have heard the rumors that Apple (AAPL) is planning on removing the standard headphone jack from the next generation of iPhones in favor of an all-in-one Lightning connector.

iPhone 7 Rumors: Apple to Drop Standard Headphone Jack (AAPL)The change would allow AAPL to make the iPhone 7 slightly slimmer (by about 1mm), but would also force consumers to purchase Lightning-equipped earbuds should they lose or break the pair that comes with their phone purchase.

While nothing has been confirmed yet, Apple stock does have a history of pushing for exclusivity: from their own Mac OS (incompatible with PC programs) to their Lightning charger cables, Apple products have always inhabited their own space in the world of gadgets — to the exasperation of many of their customers.

The company also has a reputation of cracking down hard on third-party manufacturers, including pushing out an update a few years ago that disabled the function of any phone chargers not directly manufactured and sold by Apple.

So I can’t say I’m totally surprised that the company wants to dig itself deeper into its own niche. In fact, Apple made an identical move when it first got rid of the 30-pin dock connector (from the iPods and first iPhones) in lieu of the thinner Lightning connector for the iPhone 5. And this year’s new Macbook design dropped standard USB ports and replaced them with smaller USB-C ports that also function as the computer’s power connector.

Consumer Complications Don’t Bother AAPL Stock

Apple’s decision to drop the standard headphone jack is sure to ruffle some feathers, as it would render the iPhone 7 incompatible with virtually every wired headset on the market. Should an iPhone 7 owner want to use their own headset, they would have to purchase a separate adapter — and Apple stock will likely see some consumer backlash as a result.

Another downside is that by combining power and audio output into a single port, users would be unable to charge their phones and use wired headphones simultaneously.

Apple management seems nonplussed about these kinds of complications, and it certainly won’t stop the masses from clamoring over the next iteration of the iPhone when the time comes. But frankly, I don’t see this as a major profit center or earnings mover for the company. AAPL stock tends to be at the forefront of innovation, but changes like these come at the expense of a simpler user experience.

Other rumors about the next iPhone release cycle include a waterproof case, a brighter AMOLED screen instead of an LCD display and a smaller four-inch iPhone to replace the 5C.

Per usual, AAPL will probably remain hush-hush until we get much closer to the release date, but all of these leaked rumors have already begun to generate a buzz.

Only time will tell what surprises Apple has in store for 2016.

Hilary Kramer is the editor of GameChangersBreakout Stocks Under $10High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.

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