Apple could be facing a tougher-than-expected year, with one analyst predicting that the iPhone 7’s lack of major new features could see sales of the company’s smartphones drop to levels not seen since 2014 — which would represent an almost 20 percent decline on last year’s figures.
On Tuesday Apple will report its results for the first quarter of 2016 where it is expected to report a drop in revenue of over 10 percent year-on-year, mostly as a result of slowing demand for the iPhone. Of even more interest than smartphone sales in the last quarter will be what Apple says about the current quarter and any indications it gives for the rest of the year.
Apple has already unveiled the iPhone SE this year, but it is the expected launch of the iPhone 7 and iPhone 7 Plus in September that the company will be hoping will drive sales of what represents almost 70 percent of its overall revenue.
Now, one well regarded Apple analyst is suggesting that Apple’s upcoming iPhone won’t inspire the same glut of sales as previous models, due to a lack of major new features. KGI Securities analyst Ming-Chi Kuo, who has deep supply chain sources and a good track record of predicting Apple’s future plans, says the iPhone 7 will fail to get iPhone owners to upgrade from their current model, predicting that a much revamped model is expected in 2018.
In a research note seen by 9to5Mac, Kuo predicts that iPhone sales could drop as much as 18.1 percent compared to last year (when Apple sold 230 million iPhones) to 190 million, which is comparable to the amount of iPhones Apple sold in 2014 (193 million).
For Kuo that is the worst case scenario, suggesting that at best Apple could sell 205 million iPhones in 2016, which would still represent a greater than 10 percent dip. Kuo suggests that Apple will be the only member of the top five smartphone manufacturers to record a year-on-year dip in sales in 2016. KGI is predicting that Samsung sales will remain relatively flat while Chinese brands Huawei, Oppo and Vivo will record significant growth of 15 percent, 50 percent and 45 percent respectively.
The main reason for the prediction of poor performance is that Kuo doesn’t see “many attractive selling points for the iPhone 7.” The analyst has previously predicted that Apple’s next major overhaul of the iPhone range would come in 2017, with an all-glass design, wireless charging, OLED display technology and a new larger 5.8-inch model.
On the other hand, the iPhone 7 is expected to retain a similar design to the iPhone 6s with the biggest update likely to be the removal of the headphone jack, in favor of using the Lightning port for audio. There is also reports of a potential dual-camera setup, though this could be reserved for a new iPhone 7 Plus Premium model, which Kota Ezawa from Citi Research believes will be launched later this year.
Kuo has upgraded his estimates for iPhone SE sales from 12 million to 18 million but still believes the new 4-inch model won’t have a material impact on overall sales.