According to a new research note released by well-connected KGI securities analyst Ming-Chi Kuo, Apple will not be able to reach the sales expectations set by analysts for the company's 2016 fiscal year, partly due to the limited selling points for the upcoming iPhone 7.
Analysts expect Apple to sell 210 million to 230 million iPhones over the company's fiscal year, which ends on September 24. However, Kuo thinks that in the worst case, Apple will only be able to sell 190 million units, which is an 18 percent drop in sales growth and 3 million units lower than what the company sold in 2014.
For the best case scenario, Apple will reach sales of 205 million units, which still falls short of the lower end of analyst expectations and representing a growth decline of 11.6 percent.
The reason behind Apple's decline, according to Kuo, is the slowing demand in the market for large-screen replacements for smartphones, in addition to the aforementioned limited selling points of the upcoming iPhone 7. Kuo has increased expected shipments of the 4-inch iPhone SE to 12 million units to 18 million units for the fiscal year, but the figure will still not be enough to offset the forecasted decline in shipments of the iPhone.
Kuo believes that for Apple to sustain its growth, it will have to launch innovative new features for the iPhone 7, which could include a new design for its form factor and upgrades to its specifications, both in software and hardware.
Whether Apple finds itself in the worst case or best case scenario, Kuo believes that Apple will be an underperformer, with the company becoming the only smartphone company in the global top five to record declining shipments in the year.
World leader Samsung is expected to record a shipment growth of 1.0 percent, while shipments of third place Huawei is expected to grow by 15.1 percent. For fourth place Oppo and fifth place Vivo, growth is expected to be 51.1 percent and 45.5 percent, respectively.
Rumors surrounding the iPhone 7 claim that the upcoming smartphone will have a dual camera system and Smart Connector support, in addition to being even thinner compared to its predecessor. If these rumors turn out to be true, will these upgrades be enough for Apple to meet or exceed expectations?
