One of the most reliable Apple analysts doesn’t see “many attractive selling points for iPhone 7”

By , Apr 25, 2016

Martin Hajek Concept iPhone se iPhone 7 iPhone Pro image 001

KGI Securities analyst Ming-Chi Kuo has arguably the strongest track record among his peers when it comes to anticipating unreleased Apple products. That being said, his most recent research note that he issued to clients last evening is something of a surprise to ardent Apple watchers.

In it, the revered analyst pours cold water on various iPhone 7 expectations, stating he doesn’t see “many attractive selling points” for the upcoming handset. A copy of Kuo’s note to clients was obtained by AppleInsider.

As a matter of fact, Kuo believes Apple will be the only top-five smartphone vendor to see its shipments decline this year before they rebound in 2018, in time for a rumored monster iPhone 8 refresh.

“We don’t see many attractive selling points for iPhone 7 in fiscal 2016 and are conservative on shipments in the second half of fiscal 2016,” reads the research note.

The iPhone needs a makeover

“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,” wrote the analyst.

He thinks iPhone shipments will drop due to these three reasons:

  • Intensification of market competition
  • Time needed for commercialization of new user experience technologies
  • iPhone needs a makeover to keep attracting consumers

Despite this, Apple is projected to retain its place as the second-largest smartphone vendor in the world, after Samsung. As for Samsung, Kuo thinks its smartphone sales will grow one percent this year.

Huawei will be third thanks to its sales growing 15.1 percent to 122 million handsets. OPPO will be fourth with a 51.1 percent sales spike to 74 million units and Vivo will take the fifth spot on an estimated 45.5 percent growth and 64 million units, Kuo wrote.

So, what kind of an iPhone makeover is Kuo talking about?

In the analyst’s mind, the Cupertino firm should revitalize the user experience with a new form factor design, new software feature and boosted hardware specifications.

Unimpressive iPhone refresh

Kuo’s research note slashes anticipated iPhone shipment down to between 190 million units (worst case scenario) and 205 million units (best case scenario) in the 2016 fiscal year versus Wall Street consensus of 210-230 million iPhones this year.

Assuming the worst-case estimate proves true and Apple ships 190 million iPhone units in fiscal 2016, it’ll be a worrying eighteen percent reduction in shipments. By comparison, Apple shipped 169.22 million iPhones in its fiscal year 2014 and 231.22 million iPhone in fiscal 2015.

A stronger-than-expected sales of the iPhone SE (Kuo revised iPhone SE shipments projection up from twelve million to eighteen million units) won’t be enough to offset these declines, especially with lower-than-expected iPhone 6s demand, he concluded.

Apple during its most recent earnings call warned investors to brace themselves for a year-over-year decline in iPhone sales, which has never happened since the iPhone’s 2007 debut. Apple is scheduled to report its second-quarter earnings tomorrow.

iPhone 7 or iPhone 8 features? You decide!

The problem with Kuo’s analysis is the fact that we simply don’t know which of the rumored features will make it into this year’s iPhone refresh. Some of the features that may or may not be in tow for a 2017 or 2018 iPhone include:

So, what do you guys think?

Which of the aforementioned features will appear in the iPhone 7 come this fall?

Mockup top of post via 3D artist Martin Hajek.

Source: AppleInsider

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  • ✯Mike✯

    I’d love for AMOLED, no headphone jack, and keeping/adding to the thickness for a bigger battery.

    • xSD

      yess if apple do this ill upgrade for sure

    • Shadowelite123

      I agree but i would still like to have the headphone jack.

  • hkgsulphate

    Apple is dead. Again.

    • Shinonuke


  • Ugh, Apple is doomed. Yet again.

    • Shinonuke

      Doomed again. Go switch to Android. I’ll stick to my Apple stuff

      • Alberto Espinal

        He was being sarcastic

      • Shinonuke

        Was he? I thought he might be Sachin from resmondpie

      • Alberto Espinal
  • Oh, and iPhone is a major flop. For nine straight years.

    • Shinonuke

      Yay Sachin moved to idownloadblog. Welcome!

  • Jason

    iPhone is basically dead without Steve Jobs

    • Franklin Richards

      Apple died with Steve Jobs.

      • White Michael Jackson

        Steve Jobs died while with Apple.

    • Alex

      Yeah basically. As much as I really don’t hate the protruding camera, Steve Jobs would never have released an iPhone with one.

      • igorsky

        And yet Apple somehow, miraculously, managed to sell 220 million phones with one.

      • Bill

        Apple released a lot of crap with Steve Jobs at the helm. He wasn’t a god, you know.

  • n0ahcruz3

    I completely agree on the third reason. I for one won’t be upgrading if it has the same design cues as the 6/6s.

    • Anonymous

      Iphone to iphone 3GS basically the same body style. Iphone 4 to iphone 5s basically same body style. I would say the next body style will cone iphone 8

      • n0ahcruz3

        I disagree with 4 to 5s.. The only similarity was the volume rocker.

      • Anonymous

        Still had the square box and metal strip on the edge. With each generation there are tweaks to the design but over all i think they looked the same. Maybe it just me tho

      • n0ahcruz3

        I mean square with rounded edges is an iPhone signature design.. People would want to see a 3gs to 4 design changes, a 5s to 6 design changes. You get what im saying? 3gs(shiny plastic enclosure) to 4(glass and metal sandwich) to 5(alminum with top and bottom glass) to 6(all aluminum rounded edges).

      • Anonymous

        And will agree with you, the iphone 7 will have and updated look, but i would image rounded corners personally… Im no analyst either,

  • igorsky

    “One of the most reliable Apple analysts”…

    That is hilarious.

    • Shinonuke

      He is the most reliable. Most of his prediction is correct.

    • TechnoBuff

      This guy is well respected in the analyst community as most of his Apple predictions always come true…, His name is quite familiar to a lot of people in the industry
      So it is not hilarious and people do take him seriously

  • ravinigga

    I think just OLed not amoled.
    It’s true oled is better but somehow Samsung’s screen is kinda to blue when on a white page

    • Mike

      I have the Samsung Note 5 and when I’m on a white page I don’t see any blue.

  • They’ve done the hardware thing for the past couple years.. smaller smaller smaller.. I don’t care anymore about the hardware, I want to see some action on the software side of things. Open it up for customization.. just a little bit! These devices are around us 24/7 time to allow the users to customize more then just the wallpaper. Even the watch completely missed the boat.. for the “most personal device” they sure as heck didn’t allow anything on it to prove that. Oh a new colored watch band? Seriously? But getting back to the phones.. IOS 10 needs a new interface. The hardware hasn’t been pushed at all because the software hasn’t really grown up. Time to see what Apple can do on the back end to make people understand.. we don’t need to completely reinvent the design of the phone.. we need to redesign the software that you use every day and make it easier for you to make these devices more personal. Of course that’s just my crazy opinion.. iphone 7 doesn’t interest me.. give me a software IOS 10 rumor. 🙂

    • Luke

      Well said. I wish Apple would take a hint and focus on the software and make it more customizable and enjoyable. That’s what makes the phone exciting. This iPhone will probably be my last unless Apple steps up their game.

  • Jose Antonio Gomez

    For me:
    – Wireless charging
    – Full dust proofing and water proofing
    And I won’t need to update my phone ever again.

  • afra33

    The iPhone is the best thing since the invention of the wheel.

    • Tommy

      lol wouldn’t go that far

      • Rowan09

        It might be, looked at the markets it created.

  • malhal

    Pretty obvious really, most people turned off Touch 3D to prevent problems with normal taps, e.g. Safari links. And there is only so much innovation you can do in a phone. So its obvious Apple would run out of ideas.

    • Anonymous

      I use 3D touch

      • White Michael Jackson

        I don’t.

      • Anonymous

        hahaha well hopefully you get the most out of the other features of the latest iphone… Or you might have well of waited a year to upgrade.

    • Jayy

      I use 3D Touch everyday!

    • Shadowelite123

      Wow I didn’t realize someone was so dedicated enough to ask every single person in the world if they use 3D touch or not. Props to you sir. Hmm what problems are you talking about because I don’t ever recall having any problems with taps my 6S Plus? I thought “everyone” knew to tap with normal force and not like they’re drilling with a finger.

  • Matt

    All I care is that is has the headphone port. Why should I get rid or not use- my Yamaha EPH100SL that I’ve had for almost two years now and use some sub-par earphones provided by Apple? Wireless or not, that is definitely going to be a deal breaker for me.

  • Benedict

    The problem with the rumored features is, that none of those are “new”. Everything is available from other manufactures for half of the price. Apple lost the pace years ago.

  • Supafly_Boy

    I for one, will not be getting the iPhone 7 if they go ahead with the brain dead idea of removing the headphone jack. I am not alone in this either.