Little change expected with iPhone 7. Has finally Apple plateaued?

The new iPhone 7 might reflect saturation in developed countries' markets, and a push to gain territory in India and China.

First Look

For 13 years, Apple grew and grew, buoyed by a string of innovations. Now, amid signs that it may have saturated the market in developed countries, the company may be relaxing its pursuit of technological variety in favor of a new focus on emerging markets.

On the heels of its first-ever decline in quarterly revenue, the company is set to introduce an iPhone 7 this fall that closely resembles the previous model. While the headphone plug may not appear on the iPhone 7 – with the Lightning connector taking its place as the port for both charging and connecting headphones – the display size will be the same, and the phone will likely be only a millimeter thinner, The Wall Street Journal reported.

The absence of changes may seem puzzling given Apple's habit of revamping iPhones every two years, especially with iPhone sales slumping 16 percent in the past quarter. 

While other mobile phone companies work to entice customers to stay on their mobile plans with new designs or features, Apple "marches to the beat of a different drummer," Horace Dediu, founder of mobile-industry analysis firm Asymco, told The Wall Street Journal.

One recent change appears to reflect the challenges involved in the company's shift toward emerging markets. The new four-inch iPhone SE is considerably smaller than the 6 and the 6 Plus. But the size appears to conflict with preferences in China, Apple's second-largest market and perhaps its best opportunity for growth, where consumers prefer larger phones, as The Christian Science Monitor reported in April:

Tech analysts suggest different reasons for the Chinese preference for a larger phone, but some conclude that larger phones make it easier to draw Chinese characters and they may also prefer larger phones for video purposes, because the smartphone is likely the only computing device owned by a Chinese customer.

Apple is also aiming to make headway in India, where the smartphone market is expected to grow 23 percent annually through 2018. Apple sales accounted for just 2 percent of the country's overall market, largely because prices are simply too high for most Indians, as the Monitor reported:

Establishing itself as a retailer in India would increase Apple's brand presence and enable Apple to sell its phones directly to its customers. Specifically, selling refurbished phones would help the company tap into the lower-budget market. With this move, analysts say, Apple will be able to establish itself in India while the market is growing quickly as sales for the iPhone stagnate in the US and China. But India's ultimate goal is to see Apple products made locally.