Apple's Beats brand in April unveiled the Powerbeats Pro, a redesigned wire-free version of its popular fitness-oriented Powerbeats earbuds.
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".
"While we believe the high-end smartphone market still has room for growth, the development of a newer, more innovative user experience is a prerequisite for growth," said Kuo. "We believe only iPhone will see shipments fall YoY in 2016, for three reasons: (1) intensification of market competition; (2) time needed for commercialization of new user experience technologies; and (3) iPhone needs a makeover (e.g. form factor design) to keep attracting consumers."
As far as a handset makeover is concerned, rumors indicate the iPhone 7 will share a design similar to the iPhone 6s, but may be slightly thinner, perhaps through the removal of the 3.5mm headphone jack and the implementation of a thinner Lightning port. Antenna bands across the back of the device may be removed, but are expected to remain at the top, bottom, and sides of the iPhone, while the rear camera may be flush with the case.
Other rumors suggest Apple may be planning to introduce two versions of the iPhone 7 Plus – one with a single lens and a second with a dual-lens camera system that offers DSLR-like image quality with 2-3x optical zoom and improved performance in low light conditions. Whatever form the iPhone 7 takes, Apple will be hopeful of exciting consumers in ways that perhaps the iPhone SE could not, as the company strives to overcome what some commentators have called "peak iPhone".
Apple's earnings announcement for the second fiscal quarter (first calendar quarter) of 2016 takes place on Tuesday, April 26, and will provide a look at sales of the iPhone 6s, 6s Plus, and SE following Apple's record first quarter, which saw the company announce 74.8 million iPhone sales and $18.4 billion profit on $75.9 billion in revenue.
Apple has warned that iPhone sales will decline in the March quarter and has provided Q2 2016 guidance of $50 to $53 billion in revenue and gross margin between 39 and 39.5 percent. Should Apple only take in $50 to $53 billion, the company will see its first year-over-year revenue drop in 13 years.
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.
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 units, this won't offset overall iPhone shipments decline.Kuo's note predicts that out of Samsung, Apple, Huawei, Oppo, and Vivo, only Apple will see shipments fall year-on-year, which suggests to KGI Securities that the decline in iPhone sales can't be solely blamed on industry structure.
"While we believe the high-end smartphone market still has room for growth, the development of a newer, more innovative user experience is a prerequisite for growth," said Kuo. "We believe only iPhone will see shipments fall YoY in 2016, for three reasons: (1) intensification of market competition; (2) time needed for commercialization of new user experience technologies; and (3) iPhone needs a makeover (e.g. form factor design) to keep attracting consumers."
As far as a handset makeover is concerned, rumors indicate the iPhone 7 will share a design similar to the iPhone 6s, but may be slightly thinner, perhaps through the removal of the 3.5mm headphone jack and the implementation of a thinner Lightning port. Antenna bands across the back of the device may be removed, but are expected to remain at the top, bottom, and sides of the iPhone, while the rear camera may be flush with the case.
Other rumors suggest Apple may be planning to introduce two versions of the iPhone 7 Plus – one with a single lens and a second with a dual-lens camera system that offers DSLR-like image quality with 2-3x optical zoom and improved performance in low light conditions. Whatever form the iPhone 7 takes, Apple will be hopeful of exciting consumers in ways that perhaps the iPhone SE could not, as the company strives to overcome what some commentators have called "peak iPhone".
Apple's earnings announcement for the second fiscal quarter (first calendar quarter) of 2016 takes place on Tuesday, April 26, and will provide a look at sales of the iPhone 6s, 6s Plus, and SE following Apple's record first quarter, which saw the company announce 74.8 million iPhone sales and $18.4 billion profit on $75.9 billion in revenue.
Apple has warned that iPhone sales will decline in the March quarter and has provided Q2 2016 guidance of $50 to $53 billion in revenue and gross margin between 39 and 39.5 percent. Should Apple only take in $50 to $53 billion, the company will see its first year-over-year revenue drop in 13 years.
[ 663 comments ]
Top Rated Comments
(View all)
42 months ago
Apple needs to drop the price if they want to keep sales up. 650 USD for a 16GB base model is ridiculous.
42 months ago
The Galaxy S7 Edge would definitely tempt me over an iPhone 6s Plus if I didn't already own the iPhone. Curved screen, OLED display, better camera, waterproofing etc.
42 months ago
If Apple is under the impression that they can release a minorly updated 6S in late 2016 and make it a huge seller, they're sadly mistaken. If that's the case, I won't be upgrading from my 6 Plus anytime soon.
See, Apple has a tendency of being late to the party with new features, but when they finally arrive they're awesome. At least that's how it used to be. At this point Apple is moving from "fashionably late" territory to just plain rudely late to the party.
See, Apple has a tendency of being late to the party with new features, but when they finally arrive they're awesome. At least that's how it used to be. At this point Apple is moving from "fashionably late" territory to just plain rudely late to the party.
42 months ago
Market saturation sucks. It happened to tablets and PCs. :apple: Need a new signature product and the :apple:Watch didn't do it.
42 months ago
Ming-Chi Kuo .... Enough said
What a load of .........
I do wish people would stop quoting him
What a load of .........
I do wish people would stop quoting him
42 months ago
Market saturation sucks. It happened to tablets and PCs. :apple: Need a new signature product and the :apple:Watch didn't do it.
Market saturation is fine. It's the stock market that sucks.
The iPhone is a fine product that's making massive profits and will continue to sell in large amounts.
And yet just because of ridiculous shareholder expectations they have to keep growing.
42 months ago
Oh no, only 205 million units best case scenario! It's the end of Apple! How can they possibly survive on $50 million quarterly iPhone revenue when some fool says it should have been $53 million! Sell your shares quick! This thing is going to go down faster than the Titanic! We all knew it was coming. Heaven forbid if a company ever stops growing faster than it has in the past, it must mean terrible things are coming. I'd like to see follow-up analysts reports six months later when Apple or whatever company blows the lid off whatever bad was predicted to happen. It would read something like " Ummmm...... Sorry. False alarm."
42 months ago
The reason is Ive.
He has a certain design language and seems not to be able to change that. Everybody will get tired after years and and years to look at basically the same thing. He is now also involved in UI design and that makes things even worse. Same look outside, same look inside. For what, like 10 years?
They need to change the designer. Or challenge him. He's had it too good for too long.
He has a certain design language and seems not to be able to change that. Everybody will get tired after years and and years to look at basically the same thing. He is now also involved in UI design and that makes things even worse. Same look outside, same look inside. For what, like 10 years?
They need to change the designer. Or challenge him. He's had it too good for too long.
[ Read All Comments ]
Tennessee State University last week launched the HBCU C2 Presidential Academy, a new initiative that's designed to expose students of color to coding and app development, reports The...
Apple has asked the Trump administration to exclude components for the new Mac Pro and various accessories like the Magic Mouse and Magic Trackpad from being subject to a 25 percent tariff on Chinese...
Apple Maps vehicles will begin surveying Germany next week, through mid-September, according to the Frankfurter Allgemeine.
The data collected, such as road details, signage, and landmarks,...
Since its introduction with iOS 7, AirDrop has become the favored means for iPhone and iPad users to instantly share photos, videos, documents, and more to nearby Apple devices over Wi-Fi and...
Twelve South today launched a new product called the "StayGo," which is a portable hub that connects to USB-C MacBooks and MacBook Pros.
Note: MacRumors is an affiliate partner with...
The team behind Pixelmator Pro today released a major update for the photo editing app, introducing useful new capabilities that make it easier than ever to edit your photos.
There's now a...
Television maker LG says that updates will soon arrive that make HomeKit and AirPlay 2 available on supported TVs.
LG's Australian support account on Twitter responded to a customer query...
Alongside the launch of iOS 12.4, Apple today released new versions of iOS 9.3.6 and iOS 10.3.4 for older iPhones and iPads that aren't able to run iOS 12.4.
The iOS 9.3.6 update is...
