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Analyst: iPhone 7 will be evolutionary, NOT revolutionary

The next iPhone won't be as revolutionary as previous models, RBC Capital Markets' Amit Daryanani said Tuesday, ahead Apple's quarterly earnings report.

"As you get to the 7, all the stuff you've seen so far, all the discussions, again indicate it's a bit more of an evolutionary product rather than revolutionary," Daryanani said on CNBC's "Squawk on the Street."

Daryanani considers the iPhone 6 more of a revolutionary phone with its much larger screen. The iPhone 6S? Not so much.

If a fancy new phone won't drive Apple's stock higher, then what will? Repatriating its billions in offshore funds might do the trick, according to Daryanani.

"The expectation today is about a 10 percent uptick in capital allocation as you go into the call. If it's something better, if they talk about repatriating money, that $200-billion-plus they have offshore into the US, returning it back to shareholders, that absolutely could drive the stock much higher," he said.

Daryanani points to Cisco to make his case. Cisco raised its dividend, and its stock reacted positively. He thinks the same could be true for Apple. The only problem? "The holdback on them is that most of the cash is trapped overseas right now."

Apple reports second-quarter results Tuesday afternoon. Analysts are expecting its first quarterly revenue decline year over year since 2003. IPhone sales are expected to fall for the first time since the phone was introduced nine years ago.