The 816 H1 21 degrees is meant to replace the 3 iron.

I also have the AP1 714 and during my fitting at Oceanside TPI I will was fitted for a 24 degree hybrid and was told this was the equivalent
of a 4 iron. I would assume the 21 degree would be more similar to a 2 o 3 iron but I am just guessing.

Your AP1 4 iron is 22 degrees in loft. The 816H1 is 21 degrees and the length of your 4 iron shaft is about the same as the hybrid shaft. That would make the distance about the same.

I believe the 21* is the "3" hybrid. The extra 1/2" on the irons may have something to do with the 4 iron equivalency. If that's the case, it's all a matter of which you believe you can hit on the screws more consistently.

I think it replaces the 3 iron

The only thing that matters is your distance gaps. If you hit your 4 iron and this hybrid the same distance, consider just using one or the other in the bag and fill any gaps you need with a different club. If you still have a big gap between this distance and your fairway wood, consider a less lofted hybrid or a second high lofted fairway wood. If there is no gaps and you pick either the hybrid or the 4 iron to come out, maybe add an extra wedge or just do what i do, play 13 clubs. Bag set up should be what works comfortably for you. Have fun out there.

Loft they would be very similar, but you need to consider how much effect the hybrid head would have versus an iron... the hybrid should launch higher, be more forgiving, and theoretically go further than an iron of similar loft. If you have two clubs that go the same distance something needs to change... perhaps use the surefit to turn down the hybrid to 20*?

There are some variables - The hybrid is capable of being adjusted at the hosel to better suit your requirements.
There's a chart available on the site that shows the variety of settings you might use and how they are intended to impact upon your ball flight.
This could change your distance to some extent by changing the trajectory etc.
At the end of the day, it's as Dale says - it's about gapping and then it's choice & fancy...
JT