KGI Securities


'KGI Securities' Articles

4.7-Inch iPhone to Feature Wireless Charging Next Year

Apple's next-generation 4.7-inch iPhone will feature glass casing with wireless charging, according to the latest research note from KGI Securities analyst Ming-Chi Kuo obtained by MacRumors.Our rationale is as follows: (1) the OLED model may trigger replacement demand among high-end users given its completely all-new-design form factor and notably superior specs in comparison to the TFT-LCD models; and (2) the new 4.7” iPhone, featuring glass casing and wireless charging, looks well positioned to tap replacement demand at the entry level.Kuo previously said all new iPhones are "likely" to support wireless charging next year, so 5.5-inch and all-new OLED models will likely gain the feature as well in addition to the now-confirmed 4.7-inch model. Kuo believes Apple will switch to glass casing for next year's entire iPhone lineup in order to support wireless charging, with Pegatron being the exclusive supplier of the new 4.7-inch iPhone and a wireless charger expected to be included with at least some models. The wireless charger will allegedly have wider availability by 2018. The new 4.7-inch iPhone and an OLED model featuring a "completely all-new-design form factor and notably superior specs" are predicted to drive "potentially unprecedented replacement demand" from smartphone users. Kuo forecasts Apple could sell 120-150 million new iPhones in the back half of 2017, topping an iPhone 6 sales record.To our understanding, while demand visibility in 2H17F is as yet unclear and presumed pull-in demand may change anytime, upstream suppliers may be around now setting

iPhone 8 to Feature All-Glass Casing in Order to Support Wireless Charging

Apple will switch to an all-glass casing for next year's entire iPhone lineup in order to support wireless charging, with Pegatron being the exclusive supplier of the wireless charger. That's according to the latest research note by KGI Securities analyst Ming-Chi Kuo obtained by MacRumors. According to Kuo, the transition from metal to glass casing is key if Apple is to introduce a wireless charging feature in the 2017 iPhone. While patented engineering solutions do exist for wirelessly charging devices with metal cases, issues with wireless frequency tolerances for metal alloys can limit the speed at which charging takes place. On top of that, it is widely believed that Jony Ive has wanted to introduce an iPhone that looks like a single sheet of glass for several years. iPhone concept image via ConceptsiPhone We believe one of the reasons why new iPhones will switch from metal casing to glass casing is to support wireless charging. In order to ensure a superior performance, we believe it is most appropriate for EMS suppliers to develop and make the wireless charger because then a comprehensive test can be conducted. As Hon Hai needs to deploy most resources to develop and produce OLED iPhone, we expect Pegatron will be the exclusive supplier of the wireless charger.Kuo remains uncertain whether a wireless charger will be bundled with all new iPhones, but expects at least some models to be next year, with wider availability by 2018. Kuo last week claimed that Apple will release 4.7-inch and 5.5-inch model iPhones with LCD screens as well as an all-new OLED model

Next Year's Dual-Camera iPhones Will Have Dual Optical Image Stabilization

While the iPhone 7 Plus has a dual-lens camera, only the wide-angle lens supports optical image stabilization. However, that could change next year. In a research note obtained by MacRumors, KGI Securities analyst Ming-Chi Kuo maintains his belief new dual-camera iPhone models in 2017 will support dual optical image stabilization. Kuo believes Apple will redesign the telephoto lens to support the feature in addition to existing auto focus functionality.We believe Apple will add OIS function to the telephoto CCM in order to enhance the selling points of next year’s new iPhone. We think photo quality and optical zoom range may both improve as a result. We expect the telephoto lens will be redesigned to support OIS in the telephoto CCM, with challenges likely coming from: (1) the need to increase the image circle of the telephoto lens, which will lead to longer calibration time and a more complex assembly processes; and (2) a redesign of the telephoto lens, as an increased image circle will result in degraded photo quality around the corners.Kuo said Apple's rumored 5.1"-5.2" OLED iPhone and a new 5.5-inch iPhone with a traditional LCD display will feature dual cameras with dual optical image stabilization, while a new 4.7-inch model with an LCD display is expected to retain a single-lens camera, also with optical image stabilization. Kuo expects Apple supplier Largan Precision to remain the exclusive provider of 6P and telephoto lens for the trio of new

Rumored 5.8" OLED iPhone Said to Have 5.1" to 5.2" Active Display Area

Apple is widely rumored to release its first iPhone with an OLED display next year, but reports have been conflicting about its potential screen size. KGI Securities analyst Ming-Chi Kuo previously said Apple will launch a 5.8-inch iPhone with a curved OLED display and glass casing next year, while Barclays analysts recently called for a 5-inch iPhone with a curved, bezel-free OLED display. Japanese website Nikkei also expects a new glass-backed 5-inch iPhone. Now, in a new research note, Kuo said the much-rumored premium iPhone model will indeed have a 5.8-inch OLED panel, but with a smaller actual active display area of between 5.1 and 5.2 inches. Kuo said this is for "specific design purposes," which likely points towards a wraparound or curved display of some sort.We predict OLED iPhone will be 5.1-5.2”, despite various market speculation. In terms of the display size of the OLED iPhone, current information from the upstream points to 5.8”, while that from the downstream points to 5”, which does not conflict, in our view. We predict OLED iPhone will adopt a 5.7-5.8” flexible OLED panel (with Samsung (KR) as the exclusive supplier). Nonetheless, for ‘specific design purposes’, the actual active area may be around 5.1-5.2”. Other than the OLED model, we expect Apple to launch new 4.7” and 5.5” TFT-LCD iPhone models.Kuo reiterated the all-new OLED-based iPhone will be accompanied by new 4.7-inch and 5.5-inch iPhones with traditional LCD

Next Year's iPhones to Include 4.7" LCD Model With Single Camera, 5.5" LCD and OLED Models With Dual Cameras

Apple will release a trio of new iPhones next year, according to a new research note from KGI Securities analyst Ming-Chi Kuo. Kuo believes Apple will launch a 4.7-inch model with a single-lens camera and LCD display, 5.5-inch model with a dual-lens camera and LCD display, and an all-new OLED model with a dual-lens camera in 2017.We look for new 2017F iPhones to come in three models: one OLED model, and two TFT-LCD models with 4.7-inch and 5.5-inch display. We believe the OLED and 5.5-inch TFT-LCD iPhones will feature dual-camera. Based on this prediction, our forecast of dual camera adoption rate in new 2017F iPhone models is revised up from 30-40% to 65-75%. We view this increase as favoring Largan’s sales and profit momentum as it is the exclusive supplier of wide-angle and telephoto lens. It also bodes well for Apple’s dual camera software ecosystem.Kuo did not specify the display size for the all-new OLED model, expected to be positioned as the premium model in next year's iPhone lineup, but he previously said Apple will launch a 5.8-inch iPhone with a curved OLED display and glass casing next year. Barclays analysts also recently said Apple will release a 5-inch LCD iPhone and 5.8-inch OLED iPhone, both with curved, bezel-free designs, next year. Japanese website Nikkei likewise said Apple will release three new glass-backed iPhones next year, including 4.7-inch, 5-inch, and 5.5-inch sizes. The report reiterated that one of those iPhones will be a premium model with a curved edge-to-edge OLED display to be sold alongside two models that have standard LCD

iPhone 7 Demand Has 'Peaked' as Shipments Forecasted to Decline Significantly Over Next Two Months

Just two months after the iPhone 7 and iPhone 7 Plus launched, KGI Securities analyst Ming-Chi Kuo believes demand for the smartphones has "peaked" in line with a significant monthly shipment decline starting in November. Kuo predicted Apple's overseas suppliers will revise down their iPhone shipments by 5-15% in November-December due to lower-than-expected demand stemming from a lack of significant improvements.As the 4.7-inch iPhone 7, which accounts for a higher share of iPhone shipments, is in stock in the main global markets, we believe overall iPhone shipments have peaked. We think iPhone shipment forecasts will be revised down due to: (1) lower-than-expected demand due to a lack of spec surprises in the 4.7-inch iPhone 7; and (2) shorter times for delivering online orders of 5.5-inch iPhone 7 Plus, which implies slowing demand. We note that the out-of-stock phenomenon also results from fixed capacity, and is not only due to robust demand.In a research note obtained by MacRumors, Kuo noted that the out-of-stock phenomenon that typically follows a new iPhone launch results from fixed capacity, and is not only due to robust demand. Kuo reiterated his forecast of a possible year-over-year iPhone shipment decline in the first quarter of 2017 due to the lower-than-expected demand and fierce competition in

Apple and Huawei Will Benefit Most From Note 7's Failure, but Profit May Have Already 'Peaked Out'

Apple and Huawei will be the biggest beneficiaries following the discontinuation of Samsung's Galaxy Note 7 line, according to research conducted by KGI Securities analyst Ming-Chi Kuo. The two companies will mainly see orders increased by users looking for a smartphone with dual camera support, including Apple's iPhone 7 Plus and Huawei's upcoming Mate 9. While Kuo believes Apple will benefit majorly following Samsung's troubled Note 7, the analyst also says that those benefits are "largely reflected in raised forecasts," and not as much in actual iPhone shipping numbers. Of the original 12-14 million Note 7 units expected to ship in 2016 before the exploding battery drama, Kuo estimates 5-7 million Note 7 users may switch to iPhone, mainly expected to be the iPhone 7 Plus. Consumers that have switched from Note 7 to iPhone after the recall and halted production can be identified as having the following characteristics: (1) no trust in the Samsung brand anymore; (2) could be former iOS users; (3) like dual camera feature; and (4) like the subsidy packages of telecom operators (iPhone 7 and 7 Plus were the most promoted flagship models in September). Because of this, the analyst believes Apple's biggest benefits of the Note 7 discontinuation have already "peaked out." It's estimated that it will take Apple between 3 and 5 weeks to accommodate additional orders of the iPhone 7, especially "if the company does not expand the current production capacity of the iPhone 7 Plus." Right behind Apple, Kuo believes that Huawei will gain the second biggest benefit of the

2017 iPhone to Feature Glass Design With Stainless Steel Frame on High-End Models

KGI Securities analyst Ming-Chi Kuo has outlined further predictions for next year's iPhone lineup, claiming the popularity of Jet Black models will encourage Apple to return to glass casing for 2017 models, as the material tends to have a higher gloss finish than metal.While a glossy finish is possible for metal casing, we identify two prerequisites for the 2017 new iPhone to be competitive in terms of casing design, considering competitors will definitely launch smartphone models with glossy metal or glass casing prior to Apple’s launch: (1) adoption of a glossy finish design; (2) enhanced productivity and higher yield will prevent a supply shortage, as has happened with jet black casing, which is manufactured at an unsatisfactory yield rate of 60-70% due to the metal material; and (3) better scratch resistance will improve user satisfaction. All things considered, we see glass casing as the only option.Kuo believes Apple is more likely to stick with slightly curved 2.5D cover glass on the 2017 iPhone, as used on iPhone 6s, rather than adopt a fully curved 3D design, in light of mass production considerations and drop test performance. Kuo previously said Apple will launch a 5.8-inch iPhone with a curved OLED display and glass casing next year, which a subsequent report said will be a high-end model. The other models would retain LCD displays with 4.7-inch and 5.5-inch screen sizes. Kuo said the new glass casing will be reinforced by an aluminum metal frame, while stainless steel will be used for high-end models.Metal frame can be stainless steel or aluminum, with

Jet Black iPhones Face Global Shortage as New Color Proves Difficult to Manufacture

Apple's new Jet Black color is a popular choice among early iPhone 7 and iPhone 7 Plus adopters, but the new models face a global shortage as the new high-gloss finish has proven challenging for the company's manufacturers. Jet Black models suffer from a low casing production yield rate of 60-70%, meaning that 30-40% of units do not pass Apple's quality standards and must be retooled, according to KGI Securities analyst Ming-Chi Kuo. Apple says the high-gloss Jet Black finish is achieved through a precision nine-step anodization and polishing process. When pre-orders began on September 9, shipping estimates for Jet Black models quickly slipped to November, but some iPhone 7 Plus models in the new color are now shipping sooner than expected. In-store availability of Jet Black models remains scarce, with only a few Apple Stores in France carrying the Jet Black iPhone 7 as of the time this article was published, according to iStockNow. Kuo said limited availability of Jet Black models, along with stronger-than-expected iPhone 7 Plus demand driven by Samsung's recent Galaxy Note 7 recall, contributed to an initial iPhone 7 shortage.Early shortage not entirely due to market demand. Shipment time for online orders is on par with last year’s cycle, generally estimated within 2-3 weeks, with the exception of the jet black model, which suffers from a low casing production yield rate of 60-70%. However, with the number of countries in the first wave to debut the iPhone 7 rising to 28 this year, versus 12 for the iPhone 6S launch, we believe overall demand for iPhone 7

Dual Rear Camera Likely to Remain Exclusive to High-End iPhones in 2017

On the same day the iPhone 7 and 7 Plus became available for pre-order, KGI Securities analyst Ming-Chi Kuo has released a new research report outlining his expectations for a dual rear camera in next year's iPhone model. According to Kuo, cost considerations and a niche appeal for the dual camera, which is found only on the larger iPhone 7 Plus model this year, mean that the feature is likely to remain exclusive to "high-end" models in 2017 as well. Presumably this means the dual camera would again appear only on so-called "iPhone 8 Plus" models should Apple continue to offer similar product lineups.While an attractive addition for avid picture takers and professional photographers, the iPhone 7 Plus dual-camera is not a mass-market killer application yet. Along with its high cost (estimated at over US$30-40) and the necessity for Apple to enhance the added value of high-end iPhone models, we expect only high-end new iPhone models (30-40% of them) to have a dual-camera next year. As for what improvements can be anticipated for the dual camera in 2017, Kuo indicates that optical image stabilization (OIS) is likely to be added to the telephoto camera. In the iPhone 7 Plus, only the wide-angle camera has OIS.Note that for the dual- camera of iPhone 7 Plus, wide-angle CCM is equipped with optical image stabilization (OIS) VCM, while telephoto CCM only comes with general VCM. We believe the focus of the dual-camera upgrade will be equipping telephoto CCM with OIS CCM, so as to significantly enhance optical and digital zoom quality.While 2017 would normally be considered an

iPhone 7 to Include Five Colors, IPX7 Water Resistance, Dual 12MP Cameras on Plus Model

KGI Securities analyst Ming-Chi Kuo, who has a very solid track record when it comes to Apple product rumors, has released his most detailed research report yet ahead of Wednesday's iPhone 7 launch. The report recaps a number of claims previously shared by Kuo and others while also introducing several new tidbits about the device. Kuo notes that there are many upgrades and other changes with the iPhone 7, but because the overall design is similar to the iPhone 6s, "general users may not feel the differences significantly." Details on the iPhone 7 include: - New A10 chip from TSMC that could top out at 2.4-2.45 GHz, although Apple may clock it a bit lower due to heat and power consumption concerns. - Storage capacities of 32 GB, 128 GB, and 256 GB on both the iPhone 7 and iPhone 7 Plus. The iPhone 7 Plus will include 3 GB of DRAM to support the dual-lens camera, while the iPhone 7 will continue to include 2 GB. - Five color options including the usual silver, gold, and rose gold, along with a "dark black" replacing the usual Space Gray. A new fifth color Kuo describes as glossy "piano black" will also be offered. A photo of SIM trays in those five colors surfaced earlier this week. We expect the iPhone 7 to come in piano black, dark black, rose gold, gold and silver. Only the piano black model will have a glossy finish. Given high production barriers, large-storage models may have first priority in adopting piano black casing in the initial stage.- Improved IPX7 water resistance matching that of the original Apple Watch and making the device suitable for

Apple Planning 10.5" iPad Pro in 2017, 'Revolutionary' OLED iPad as Soon as 2018

Noted analyst Ming-Chi Kuo has released a new research report outlining his expectations for the future of Apple's iPad lineup, predicting three new iPads ranging from 9.7 inches to 12.9 inches to be released in 2017. According to Kuo, Apple is aiming to introduce a new 10.5-inch iPad Pro model next year to go along with a 12.9-inch iPad Pro 2 and a "low-cost" 9.7-inch iPad model. Kuo makes no mention about the fate of the current 7.9-inch iPad mini, although many have assumed that model may be phased out as the recent 5.5-inch iPhone "Plus" models have helped lessen demand for Apple's smallest tablet.We expect three new iPads (12.9” iPad Pro 2, new size 10.5” iPad Pro & low-cost 9.7” iPad) to be launched in 2017, though this may not drive shipment growth amid structural headwinds; 2017F shipments to fall 10-20% YoY. If the iPad comes in a larger size, such as a 10.5” model, we believe it will be helpful to bid for tenders within the commercial and education markets. As a result, we expect Apple to launch a 10.5” iPad Pro in 2017. In addition, we estimate the 12.9” iPad Pro 2 and 10.5” iPad Pro will adopt the A10X processor, with TSMC (2330 TT, NT$177.5, N) being the sole supplier using 10nm process technology. The low-cost 9.7” model may adopt the A9X processor, which is also exclusively supplied by TSMC.Looking even further ahead, Kuo predicts "revolutionary" changes for the iPad lineup for 2018 "at the earliest," with Apple making "radical" changes to the iPad's design and shifting to an AMOLED display.Revolutionary iPad model likely to be introduced in 2018F at

Upgraded Apple Watch 1 Models Said to Launch Alongside Apple Watch 2 Later This Year

In addition to predicting an all-new Apple Watch 2 with a GPS, barometer, larger battery, and more, KGI Securities analyst Ming-Chi Kuo today claimed that upgraded first-generation Apple Watch models with faster TSMC-built processors and superior waterproofing will likely launch in the second half of 2016. Kuo said the upgraded Apple Watch 1 models will not have a GPS, barometer, or other larger additions reserved for the Apple Watch 2, nor will the waterproofing improvements be as significant, suggesting only an incremental refresh of internal hardware. The watches are said to retain a similar form factor. The well-connected analyst expects another Apple Watch price cut once the new models are launched, but he did not specify whether the reduction will apply to existing first-generation models, upgraded first-generation models, Apple Watch 2 models, or some combination of the three lineups. Apple lowered the starting price of the Apple Watch Sport to $299 in March 2016, a savings of $50 compared to the device's initial $349 launch price in April

Faster Apple Watch 2 With GPS, Barometer, Larger Battery, and Same Thickness to Launch Later This Year

KGI Securities analyst Ming-Chi Kuo issued a research note to investors today in which he predicts an all-new Apple Watch 2 will likely launch in the second half of 2016 with a faster TSMC-built processor, GPS, barometer, superior waterproofing, and a higher capacity battery. Kuo, well connected within the supply chain, believes the second-generation Apple Watch will retain the same screen sizes and thickness as existing models, with a similar form factor overall, despite adopting thinner display technology. However, while the Apple Watch 2 was once rumored to include cellular connectivity, Kuo does not expect LTE support until 2017. The analyst also predicted that upgraded first-generation Apple Watch models will debut in the second half of 2016 with similar processor and waterproofing upgrades, but likely without the Apple Watch 2's most significant additions like a GPS and barometer. Kuo expects another Apple Watch price cut once the new models are launched, but remains conservative about prospective shipments in 2017. Apple Watch shipments could rise further between 2018 and 2020, pending significant form factor changes, FDA approvals supporting more medical and health applications, and 5G network commercialization, according to Kuo. Apple has been pushing iPhone and Apple Watch sales together, so updated models of each device launching in tandem would be appropriate. The tentatively named iPhone 7 and iPhone 7 Plus are rumored to launch on September 16, with pre-orders possibly starting a week earlier on September 9, so all-new Apple Watch 2 and upgraded

2016 MacBook Pro May Include OLED Display Touch Bar and Touch ID

Apple plans to introduce a revamped high-end MacBook Pro this year that'll include a thinner and lighter form factor, Touch ID and a new OLED display touch bar above the keyboard, according to a new report from KGI Securities analyst Ming-Chi Kuo. The new MacBook Pro would come in 13- and 15-inch variations and arrive in the fourth quarter of 2016. While long overlooked, the MacBook line is the brightest spot for Apple’s 2016 rollouts. This is particularly true of the two new MacBook Pro models, to be introduced in 4Q16, as they will have a thinner and lighter form factor, Touch ID, use OLED display touch bar (to replace physical function keys, located above the keyboard) and adopt USB- C / Thunderbolt 3.Kuo calls the new MacBook Pro updates the "most significant upgrade ever undertaken by Apple." The new "thin and light" design will be helped by new metal injection mold-made hinges and the butterfly-mechanism keyboards that debuted in the 12-inch MacBook. There has been speculation Apple would introduce Touch ID to MacBooks and, in the meantime, Apple engineers are working on a way users could unlock their Macs with Touch ID on iPhone. The 12-inch MacBook will also be joined by a 13-inch MacBook, according to Kuo. The analyst believes that Apple will move forward with all three MacBook lines this year, with the MacBook Pro occupying the high-end slot, the MacBook will replace the Air as the medium-level model and the MacBook Air will serve as an entry-level model with comparatively low prices. In April, it was reported that the new MacBook Pros would see slimmer

Apple to Produce Single iPhone 7 Plus Model With Dual-Lens Camera and 3GB RAM

Apple plans to produce a single iPhone 7 Plus that will ship with a dual-lens camera and 3GB of RAM to compensate for increased image processing demands, according to a new report from KGI Securities analyst Ming-Chi Kuo that walks back from past reports suggesting Apple would produce two iPhone 7 Plus models. Earlier rumors from Kuo indicated Apple was working on multiple versions of the iPhone 7 Plus -- a model with a single lens camera to match the iPhone 7 and a second "Pro" model with a dual-lens camera -- but Kuo now believes this is no longer Apple's plan as a single-camera iPhone 7 Plus would undermine demand for the dual-camera model. Apple is expected to continue producing two iPhone models, in 4.7 and 5.5-inch sizes.In a previous report, we said the new 5.5-inch iPhone model (referred to as iPhone 7 Plus), to be launched in 2H16, may come in two versions: one with rear single-camera and the other with rear dual-camera. However, we now believe Apple (US) will only roll out the dual-camera version in 2H16, with 3GB RAM to meet image processing requirements, and we estimate shipments of this model in 2016F of 20-30mn units.Kuo does not foresee any significant supply bottlenecks that would affect production of the dual-camera iPhone 7 Plus, but because of design constraints, he predicts optical zoom capabilities, which have been previously rumored for the device, will be limited. Today's report from Kuo follows the leak of design blueprints said to be sourced from Apple supplier Catcher Technology, which suggest that the iPhone 7 Plus will also exclusively

Decline in iPhone Shipments Could Make Apple Worst-Performing Top Five Smartphone Brand of 2016

Apple's global iPhone shipments will fall short of analysts' consensus estimates of 210 to 230 million units in the 2016 fiscal year, according to a new research note issued by respected KGI Securities analyst Ming-Chi Kuo. In a worst case scenario, iPhone shipments in 2016 are expected to reach just 190 million units, which is an 18% reduction in shipment growth and 3 million fewer iPhones than Apple sold in 2014. Even in a best case scenario, said Kuo, Apple is expected to sell 205 million units, 5 million short of the lower end of analysts' estimate range and amounting to a 11.6% reduction in growth. Regardless of the best or worst case scenario, Kuo predicts Apple will underperform the industry and become the only global top-five smartphone brand to see shipments decline in 2016. Mockup of iPhone 7 case. The analyst described slowing market demand for large-screen handset replacements and limited iPhone 7 selling points as key factors behind the expected decline, noting that the contribution of revised-up iPhone SE shipments in the 2016 fiscal year will remain "insignificant". Given the fact that shipments fell YoY for the first time in 1Q16, we don't think large-screen replacement demand will contribute much to growth. To sustain growth, the iPhone needs to come up with more innovative features to revitalize the user experience, for example in form factor design, software and hardware specs. We don't see many attractive selling points for iPhone 7 in 2H16 and are conservative on 2H16F shipments. While we revise up 2016F iPhone SE shipments from 12mn to 18mn

Apple to Release iPhone With Glass Casing and AMOLED Screen in 2017

KGI Securities analyst Ming-Chi Kuo has issued a new report that again predicts Apple will switch to non-aluminum casing, with glass being the most likely candidate, for the majority of new iPhone models starting in 2017. If accurate, the design change would not apply to the iPhone 7 expected to launch this September. Specifically, Kuo believes that in order to differentiate iPhone from an increasing number of competing aluminum smartphones, Apple will return to iPhone 4s-like glass casing next year to allow for an all-new form-factor design. The switch would allow Apple to again "enhance the competitiveness" and innovation of iPhone.If iPhone 7 still uses an aluminum casing in 2016, it will be the fifth year in a row that iPhone has done so, which means there is no longer a feeling of freshness to appeal to consumers. Also, a lot of Apple’s (US) competitors are also adopting aluminum casings, which means iPhone no longer has a clear edge due to a lack of differentiation. On expectations that iPhone shipments will decline in 2016, we believe Apple will be more strongly motivated to use non-aluminum casings in 2017 in a bid to enhance the competitiveness of iPhone by offering an all-new form-factor design. The oft-reliable analyst adds that the ratio of new iPhone models using aluminum casing will likely drop from 100% currently to 40% or less, indicating that some aluminum-based iPhones will likely remain available for at least the short term. This could be older models like the iPhone 6s and iPhone 6 series. Kuo notes that some investors are concerned that glass

Apple Watch 2 Expected to Focus on Internal Upgrades Rather Than External Changes, Launch in Late 2016

Apple Watch shipments will decline more than 25 percent year-over-year in comparison to 2015, according to a new research note issued by KGI Securities analyst Ming-Chi Kuo. The wearable device sold an estimated 10.6 million units in eight months last year, but Kuo predicts that even with the launch of the Apple Watch 2, and a full twelve months of sales, the device's shipments will still come in at less than 7.5 million units in 2016. The analyst describes an "immature wearable device market" and a few key lacking features of the first-generation Apple Watch -- iPhone independency, no killer app, limited battery life, etc. -- that will contribute to its overall sales decline prior to the launch of the second-generation version. Kuo believes that the Apple Watch 2 will enter mass production in the third quarter of 2016, in line with a fall launch alongside the iPhone 7, so its overall contribution to shipping numbers for the year is predicted to be limited. Kuo's note also predicts some of the features of the next version of the Apple Watch, which is expected to adopt the same upgrade cycle as the iPhone. In essence, 2016's Apple Watch 2 will see some under-the-hood spec improvements and possibly minor form factor changes, while fans will have to wait until 2017 for a massively redesigned wearable from Apple. The similar design is one of Kuo's biggest reasons for declining Apple Watch shipments in 2016, despite even the uptick in sales the device could have during the holiday season. The recent KGI Securities research note directly conflicts with a report from

iPhone SE Sales Forecasted as 'Lackluster' Over First Weekend

While it appears that Apple has elected not to share first weekend sales numbers for the iPhone SE, as it has done in the past for some flagship models, multiple analysts have forecasted that sales of the new 4-inch smartphone were "lackluster" during its first three to four days of availability. In a research note issued today, KGI Securities analyst Ming-Chi Kuo questioned last week's CNBC report claiming that iPhone SE orders topped 3.4 million in China, and added that demand for the iPhone SE "has been significantly lower than that of past new models" since launching on March 31.Lackluster iPhone SE demand supports our view. Although there exists a market survey that indicates iPhone SE preorders top 3.4mn units in China, we couldn’t find more evidence to support this. However, judging by the delivery time for iPhone SE preorders, we believe initial demand for the iPhone SE following the announcement has been significantly lower than that of past new models. We believe this is due in part to lackluster demand for smaller-size smartphones and, more importantly, that the product itself offers no significant upgrades to form factor or hardware specs.Mobile analytics firm Localytics echoed Kuo, claiming that iPhone SE adoption was "lackluster" following the device's launch. According to the firm's research, the iPhone SE "managed to grab only 0.1% of the iPhone market" over its first weekend of sales, which marked lower adoption than the iPhone 5s and all of the "6" models. Apple launched the iPhone SE last Thursday on the same day as Tesla began accepting