KGI: Apple could add 5-7 million iPhone sales due to Note 7 discontinuation

By , Oct 17, 2016

iPhone 7 wallpaper desktop design_gallery_jet_black_large

Global Note 7 recall and discontinuation could prove to be a blessing to Apple, helping the Cupertino firm boost iPhone sales by five to seven million units, according to KGI Securities analyst Ming-Chi Kuo.

In a note to clients this morning, a copy of which was obtained by MacRumors, the analyst speculates that Apple and Chinese Android manufacturer Huawei could be the primary beneficiaries of the Note 7 discontinuation, with Apple potentially seeing an influx of orders for the iPhone 7 Plus due to its dual-camera system.

Kuo also cautioned that another blunder similar to Note 7—especially on the upcoming Galaxy S8 smartphone—would destroy the Samsung brand.

From the report:

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).

Kuo thinks that Apple’s biggest benefits of the Note 7 discontinuation may have already “peaked out” because the company may need up to five weeks to fulfill iPhone 7 Plus orders from ex-Note 7 customers, especially if it “does not expand the current production capacity of the iPhone 7 Plus.”

Any benefits for Apple from the Note 7 fiasco are “largely reflected in raised forecasts” rather than in actual iPhone shipping numbers, reads the report.

Huawei’s upcoming Mate 9 smartphone, due later this year, also features dual cameras, making it an interesting proposition for former Note 7 owners who want to stay in the Android ecosystem.

Google’s recently launched Pixel and Pixel XL smartphone family is currently out of stock, but if Google manages to ramp up production quickly it could also reap some of the Note 7 customers.

Korean news site ET News reported last week that Samsung is apparently “paying extra careful attention” to Galaxy S8 development due to “huge changes” in its design and hardware.

But if the forthcoming phone turns out to suffer from similar mistakes as the Note 7, the Samsung brand “will be hurt immensely,” speculated the analyst.

Source: MacRumors

  • Share:
  • Follow:
  • MvP77

    Left my iPhone 6s+ for the Note7. Went through the first recall and in my mind I was thinking just go back to apple, but the Note7 was a great phone. So I got the “good one” when it came in and we know how that went.

    When I returned they automatically assumed I would get a S7 Edge. I turned it down and after going to 3 T-Mobile stores I finally found a iPhone 6s (last 64gb left). And ordered a 7+. The rep that helped me most that returned theirs was getting a 6s or ordering a 7.

    • Jamessmooth

      did they offer you anything to stick with samsung?

      • MvP77

        Samsung is offering $100 bill credit if you switch to a edge or S7.

  • n0ahcruz3

    Thats what i said a few weeks ago, i think i should be an Analyst lmfao

  • Rowan09

    Yes if Samsung messes up the S8 it’s basically over for them. It’s time for some other Android Manufacturer to step it up and since the iPhone 8 (or whatever it will be called) is suppose to be a huge update Samsung is in for a long year in 2017.

    • It sounds like that’s what Google aims to do with the Pixel. I wouldn’t be surprised if the Pixel ends up becoming Samsung’s biggest competition within the Android community.

      • Rowan09

        Google is positioning itself to take out all manufacturers using Android with Nougat. They added pip, etc which essential is what Samsung had on other companies, now its baked into the OS.

      • Yeah Google has been doing that for a long time now. When they started much of their OS and apps were open source, but every year they turn more of their open source offerings into abandonware and replace them with closed source licensed apps. They are also forcing manufacturers in the Open Handset Alliance to not build any Android handsets that aren’t using Google’s proprietary apps (which is why Amazon any of the big companies to make their fire lineup).

        I always have to laugh when people tell me the reason they love Android is because it’s so open because they have no idea that Google is open in lip service only.

      • Rowan09

        Exactly. IOS might be more open than Google beachside iMessage is open, Siri is open, etc since IOS 10. None of Google’s services is open.

      • I know that the UNIX OS that powers iOS and MacOS is open source (like Google) and that some select items are also open source like HealthKit, WebKit and Swift. I wasn’t aware of those other ones being open source though. Or by open did you mean extensible?

      • Rowan09

        Extensible would be a better word since IOS 10 even call kit. None of Googles services are open source and cannot be modified.

  • Gethro

    Apples just jumping up and down laughing with joy right now for the opportunity

  • I find a certain irony in that after so many years this is the one in which the long court battle between Samsung and Apple ends, but it’s also the year that Samsung messes up and potentially looses millions of customers to Apple. It’s almost like in the end things are starting to right themselves.

  • george

    That’s like saying if the iPhone 7 plus was blowing up people would switch to the note 7. You don’t understand an android power user if you think anyone can just switch to iOS and be perfectly happy.

    • You’re correct that people who are heavily invested into an eco system are not likely to switch platforms and in the largest poll done yet on this subject 54% of Samsung users said they would be sticking with Samsung, 60% plan on staying with Android but getting something else, and 28% claim they are planning on moving to Apple.

      28% of the 74 million smartphones sold would indicate that potentially around 20 million people are thinking about switching. Now granted when push comes to shove and people realize what they would have to give up to switch that number will certainly more than half. But all things considered, I don’t think 5-7 million estimated sales is a huge grasp. It will be interesting to see how it all plays out though as only time will tell.

  • jOn Garrett

    I’m one of those people who actually tried to buy a Note 7 AFTER the recall–not for any particular reason, I just wanted a phone that might be hard to get.