iPhone Sales Predicted to Drop for the First Time in 2016

iPhone Sales Predicted to Drop for the First Time in 2016

With the release of multiple new products this year, the Apple brand is stronger than ever. The release of the iPhone 6s in September saw Apple break another sales record with 13 million units sold within the first three days after the launch.

In fact, the iPhone has seen sales increase every year since the original iPhone was introduced in 2007. To many people, the future for Apple looks very bright. A recent research note by Katy Huberty of Morgan Stanley, however, paints a bit less of a rosy picture for the future. Huberty predicts a drop in iPhone sales in 2016.

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Huberty predicts that iPhone sales will see a 5.7% drop in Apple’s 2016 financial year (or 2.9% in 2016’s calendar year). A 5.7% drop would mark the first time ever decline in iPhone sales for a fiscal year. Although iPhone 6s sales are soaring, Huberty points to “higher prices in international markets” like China, and “maturing smartphone penetration in developed markets [weighing] on upgrades and new user growth.”

Her prediction is also, in part, based on an estimated 10% drop in component orders for the fiscal year.

Huberty did note that the estimated 10% drop in component orders could be due to “robust inventories” as opposed to weak demand for the iPhone. She also noted that the estimated drop in sales represents a “worst-case scenario.”

Noted analyst Ming-Chi Kuo of KGI Securities also recently predicted that iPhone sales would slow down in early 2016 after the holiday season, but that the release of a new 4-inch iPhone would boost things right back up. Kuo also predicts that the more budget-friendly 4-inch phone would help extend sales into emerging markets.

Several weeks ago, Huberty predicted a 6.8% increase in iPhone sales for the fiscal year. Only time will tell what the future holds for Apple.

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