Apple Inc, the world's most valuable publicly traded company, unveiled its new water-resistant iPhone 7 and 7 Plus with high-resolution dual-lens cameras at its fall product event on Wednesday.
The company also announced that a Super Mario game was coming to the new phone and Pokemon Go would feature on its upgraded Apple Watch.
One new feature -- which may upset some consumers -- is the removal of the headphone jack, requiring audio to be delivered via Apple's proprietary "lightning" connector or by wireless.
"From the start we designed lightning to be a great audio connector," Apple Vice President Phil Schiller told the unveiling event.
"We are taking the headphones in iPhone 7 and 7 Plus to lightning, and including them in the box with the device. We have also made an adaptor, which will be included in the box as well."
Apple typically gives its main product, which accounts for more than half its revenue, a big makeover every other year. Its last major redesign was in 2014 which suggests the next revamp will come in 2017.
“It looks like part of the reason they are keeping the design the same this year is there are bigger changes they are working on for next year,” said analyst Jan Dawson of Jackdaw Research.
At its annual product launch in San Francisco, the company is expected by blogs and analysts to reveal an iPhone without a headphone jack, paving the way for wireless headphones, a touch-sensitive home button that vibrates, double-lens cameras for the larger 'Plus' edition and other incremental improvements.
Super hyped for the #iphone7 announcement today yay
— no chill kowasd (@nochill_kowa) September 7, 2016
Sales of the iPhone dropped two consecutive quarters in this year, the first declines in the history of the device. With many consumers who purchased the iPhone 6 and 6 Plus due for an upgrade, Apple may eke out single-digit gains in sales for the 7, Dawson said.
But some consumer technology (WEB) sites are advising users to hold off on upgrading until the next year’s version, which will mark the 10-year anniversary of the iPhone.
Analysts say the iPhone 8 may feature a wider display that reaches from one edge of the device to the other and a home button integrated into the screen.
Wall Street is impatient for growth, and Apple will be hard-pressed to reverse the downward trend this year, said Colin Gillis, an analyst with BGC Partners.
“The iPhone 7 runs the risk of disappointing investors,” he said.
Consumers are waiting longer before replacing their phones, a shift that Apple must address in its product roadmap, said analyst Ben Bajarin of Creative Strategies.
Analysts predict the Apple Watch will be the second closely watched feature of the event. Apple is expected to revamp the wearable, released last year, with a faster processor and a GPS chip, enabling users to track runs and other workouts without their phones. Most analysts believe sales of Apple's watch - which the company has not disclosed - have not yet justified the fanfare.
Starting at $299, well above many other wearables on the market, the most meaningful change Apple can make is a price cut, Bajarin said.
“This category is very price sensitive,” he said. Apple is "not there yet."
The launch comes as the US tech giant is appealing a European Commission's ruling that Ireland granted it undue tax benefits of up to $14.5 billion.