KGI (again) predicts iPhone demand has peaked for the year due to lackluster improvements

By , Nov 14, 2016

iPhone 7 jet black back camera

Shortly following the iPhone 7 launch in September 2016, KGI Securities analyst Ming-Chi Kuo predicted fewer iPhone 7 sales than the iPhone 6s garnered in 2015. In a new note issued to clients today, a copy of which was obtained by MacRumors, the analyst reiterated his belief that iPhone demand has peaked for the year due to a lack of significant improvements.

He is now forecasting a drop in unit shipments in November and December from five to fifteen percent based on supply checks and greater iPhone 7 stock availability.

Orders for the 4.7-inch iPhone 7 are limited because the larger-screened iPhone 7 Plus with dual cameras has seen greater than expected demand. And due to increasingly intensifying competition in China, the analyst warned that Apple may be unable to expand its market share in that important market.

From Kuo’s note to clients:

As the 4.7-inch iPhone 7, which accounts for a higher share of iPhone shipments, is in stock in the main global markets, we believe overall iPhone shipments have peaked.

We think iPhone shipment forecasts will be revised down due to: (1) lower-than-expected demand due to a lack of spec surprises in the 4.7-inch iPhone 7; and (2) shorter times for delivering online orders of 5.5-inch iPhone 7 Plus, which implies slowing demand.

We note that the out-of-stock phenomenon also results from fixed capacity, and is not only due to robust demand.

It’s worthwhile keeping in mind that Kuo’s record for accuracy has suffered over the past year or so. At any rate, he predicted peak iPhone sales two months ago and now he’s banging the same drum. Draw your own conclusions.

Kuo’s now reduced his forecast down to 70-75 million iPhone sales in the final two months of the year versus the consensus estimates ranging from 75-85 million units, which is literally the same figure he offered two months ago.

Kuo’s pessimism was somewhat echoed by Reuters saying this morning that some of the Chinese iPhone owners who cannot afford the iPhone 7, or are unwilling to trade up their existing handset over the perceived lack of improvements on the iPhone 7, are buying aftermarket mods to make their exiting device look like an iPhone 7.

These modifications range from various stickers and engraving services to replacing the outer casing of the iPhone 6/6s with a fake iPhone 7 shell complete with false dual-cameras and even dust plugs to hide the removed headphone jack.

Source: MacRumors

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  • n0ahcruz3

    After a month using my 7 plus, im definitely feeling the “lackluster” improvement, i find it randomly rebooting sometimes, portrait is okay but really really needs improvement. I’ll probably gonna trade this in for the 8. So in short, im a bit disappointed with the 7 plus.

    • Abhijeet Gupta

      Ditto AF, I think I’ve wasted a lot of money. Should have Kept the 6s and got a pixel instead . Best of both worlds

      • n0ahcruz3

        Agree, i was very excited for the dual cam “dslr” like quality but now i think it’s overhyped and the software is still in it’s infancy. iPhone 8 will probably my last iPhone.

      • Abhijeet Gupta

        Beta, I say it’s still an alpha release, it’s a hit or miss game. Guess what. Idk if I can pull it off, but the galaxy s8 is shaping up to be an amazing phone, might make a jump, iPhone from 6s onwards has been a disappointment. That’s just my pernsoal opinion. I’m still having my 12′ inch MacBook and I say it’s Revolutionary, they nailed it, same with the watch, my Apple Watch is still with me, didn’t go for 2nd gen coz I think it’s just useless. Apple

  • Al Fresco

    They should have not let the fact that the 8 was gonna be a lot better get out into the media. People are happy to wait. Most 6’s and 6s’ are good enough as is. the 7 is just an incremental update.

    • Impreza

      I don’t know if you can control what gets put out in the media, even if you did, the media will make something up.

  • Rowan09

    I must disagree with the lackluster upgrade. The only reason this statement is made is due to the look and nothing more. Changing a design and keeping the same internals would get most people excited over changing the intervals for the most part.

  • ProllyWild

    To be honest the 7 update is not a must-have. When you have it there are quite a few things to appreciate.

    I appreciate the larger storage capacity. I enjoy better photos, and even my wife is envious of portrait mode on my 7 plus in comparison to the photos from her 7. It’s faster and I’m not one suffering from any odd reboots. Since I’m in Japan, the addition of Apple Pay support is huge for our market.

    Other than that it’s nothing revolutionary. Also I find the dual camera implementation on the 7 plus to be a bit off. I get that the size allows for it, where it would not likely be possible on the 7, but customers don’t understand that. It kind of screams “for the time being with the technology at hand, this is the best we could do…sorry…”