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iPhone 7

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Apple has had tremendous success sticking to a certain formula with its iPhone launches. Tick, tock. First Apple releases a new iPhone, then Apple releases an updated iPhone “S” that looks the same but packs more power and new features. This year, however, Apple is essentially going to release another “S” model despite the fact that we’re due for a redesign.

People always resist change, so the reaction to yesterday’s news isn’t terribly surprising. But here’s the thing: Strategically, now is the perfect time to make this huge change and wait another year before launching a redesigned iPhone.

First of all, next year marks the tenth anniversary of the original iPhone. There’s no question Apple was going to save its big new launch for 2017, and according to rumors it’s indeed going to be big. Reports suggest it’ll sport a nearly edgeless OLED display with no home button. Instead, Touch ID will be embedded right in the new iPhone model’s display.

Should Apple have devoted time and resources to launching two completely redesigned iPhones in consecutive years? That’s just not how Apple works right now. One or both of them would have compromised in too many areas, and the user experience would have suffered as a result. By launching a second “S” model of sorts before the big 2017 refresh, Apple is using a tried and true model as its base and building in more power and new features on top of it.

But there’s another important consideration here. 2016’s iPhone 7 and iPhone 7 Pro launch will mark two years since the iPhone 6 and 6 Plus were released. You’ll recall of course that Apple’s iPhone 6 and 6 Plus sales were absolutely insane thanks to pent-up demand for iPhones with larger displays. So beginning in September and carrying through the following quarters, tens of millions of people will be due for an upgrade

It’s quite possible that iPhone sales will continue to slide a bit in the quarters following the iPhone 7’s release, but that slide will be minimized by the waves of iPhone 6 owners who want new iPhones. And of course, every US carrier offers phone leasing programs now, as does Apple, so getting a new iPhone 8 next year after picking up a new iPhone 7 this year won’t cost anything beyond an activation fee.

Long story short, releasing a second S series in 2016 is the right move from a business sense, and that’s likely a big part of the reason that Apple’s stock recovered so quickly on Tuesday.