Has Apple Inc.’s iPhone 7 Lost Its Shine in Just a Week? (AAPL)

iPhone 7 - Has Apple Inc.’s iPhone 7 Lost Its Shine in Just a Week? (AAPL)

Source: Apple

Apple Inc.’s (NASDAQ:AAPL) iPhone 7 and iPhone 7 Plus have been in stores for one week now, and it has been a roller-coaster ride — for the phones’ reputation and Apple stock alike — ever since.

First the iPhone 7s were dismissed as being dull incremental updates. Then they were surprisingly good. But as consumers got their hands on them, iPhone 7 issues started popping up, and now the list keeps growing.

The latest is a complaint that phone-call sound quality is distorted.

Apple Inc. iPhone 7 sound issues

Source: Apple

Is the iPhone 7 losing its unexpected shine already?

iPhone 7 Surprised Many

The early expectations for the iPhone 7 weren’t great. The new iPhone looked almost identical to the old one and the one before that. All the cool stuff — a curved OLED screen and no buttons at all on the front — was on hold for the iPhone 8. And there was considerable anger over the decision to ax the headphone jack.

But as reviewers got their hands on the new iPhone, the narrative began to change.

Subtle tweaks Apple made to the iPhone 7, like re-routing the antenna band to make it less obvious, added up. The new Jet Black finish option was gorgeous. And with the Samsung (OTCMKTS:SSNLF) Galaxy Note exploding battery crisis, maybe Apple was right to have kept a proven design rather than to take risks by pushing the envelope.

The water resistance worked even better than expected. The display was a work of art even if it was just LCD. The A10 Fusion CPU was a performance monster, and the dual-camera optical zoom of the iPhone 7 Plus was pushing out some incredible images when given to pro photographers.

Add in the boosted base storage — 32GB up from 16GB — and the iPhone 7 was turning into a sleeper hit.

The List of iPhone 7 Issues is Adding Up

However, in the week since actual consumers got their hands on the new iPhone, the list of complaints has been growing. Most are minor issues, but many are the sort of thing you simply wouldn’t expect from Apple.

Among the iPhone 7 issues currently being tracked:

And the latest, which started popping up on user forums over the past few days: Some iPhone 7 users are experiencing poor or distorted audio when taking voice calls.

Yes, people do still use smartphones for making calls, so this is a problem.

Did Apple Drop the Ball Despite Playing It Safe?

None of these iPhone 7 issues is anywhere near the severity of those exploding Galaxy Notes. Most of the technical issues like the hissing affect a relatively small number of users and only under specific circumstances. The scratchy finish? Apple did warn buyers up front that the Jet Black scratches easily. The camera testing is refuted by many professional photographers, and even Consumer Reports admitted the iPhone 7 Plus scored a noticeable zoom improvement with that second lens.

The reality is what looks like playing it safe with the iPhone 7 actually involved some very significant technical leaps by Apple. The A10 Fusion CPU is the company’s first move to a quad-core processor in an iPhone. The Home button is step one in eliminating the button altogether. The dual-camera system is expected to kickstart the feature in smartphones in general.

Overall, though, there’s a growing sense that AAPL is slipping when it comes to quality control.

The “old” Apple probably wouldn’t have released an iPhone that can become very noticeably and permanently marred after one day of use. It would have caught the EarPods that keep crapping out, especially given the sensitivity over forcing people to go the Lighting route instead of the headphone jack.

Perhaps worse, the growing list of issues has the potential to take the shine off the iPhone 7 and even slow its sales.

Bottom Line

There are two major takeaways for the company and Apple stock holders out of this past week:

First, Apple needs to get on top of the issues. Replace any defective iPhones, nail the cause and fix any related components or production issues.  Second, it needs to learn from the iPhone 7 launch and double down on quality control for the iPhone 8.

This year, with low expectations and a flailing rival in the background, Apple got a break. But if the iPhone 8 has a similar list of woes, 2017 will be an iPhone 10th anniversary that Apple won’t much enjoy celebrating.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/apple-inc-iphone-7-aapl-stock-shine/.

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