KGI says 'iPhone 7' won't have 'many attractive selling points,' predicts competitors to outperform

Posted:
in iPhone edited April 2016
Noted analyst Ming-Chi Kuo of KGI Securities continues to have a bearish outlook on iPhone sales through the end of 2016, telling investors on Sunday that he believes Apple will be the only top-five smartphone vendor to see shipments decline this year.




Though he didn't get into specifics about the "iPhone 7," Kuo said he doesn't believe it will have "many attractive selling points." As a result, he has a pessimistic outlook on iPhone sales, continuing to predict shipments will fall somewhere between 190 million and 205 million units.

The lone bright spot from Kuo was estimates for the iPhone SE -- he has revised his projected shipments up from 12 million to 18 million units.

Still, he doesn't think a stronger-than-expected performance for the iPhone SE will be enough to offset declines, particularly for the iPhone 6s. Apple is set to report its second-quarter earnings this Tuesday, and has already warned investors that it expects to see the first-ever year-over-year decline in iPhone sales.

Kuo had already indicated earlier this month that he believes iPhone sales are likely to fall below 200 million for 2016. To put the forecast in perspective, Apple shipped 232 million iPhones in 2015, and most on Wall Street expect Apple to ship between 210 million and 230 million iPhones this year.

Kuo's projections call for Samsung to grow sales 1 percent, retaining its spot as the largest smartphone vendor in the world. He believes Apple will retain second place despite having sales projected to drop between 11.6 and 18.1 percent.

In third, he believes Huawei will grow sales 15.1 percent to 122 million units. Fourth is OPPO with projected growth of 51.1 percent to 74 million units, while Vivo is forecast to take fifth on 45.5 percent growth and 64 million units.

To stimulate growth, Kuo believes the iPhone "needs a makeover" to attract consumers. It's expected that the "iPhone 7" will sport a new chassis when it debuts later this year, but the analyst apparently does not believe that will be enough.

Instead, he believes Apple is on track to release a major redesign in 2017 with a glass back and OLED display. Since most smartphones on the market feature aluminum backs, he believes switching back to glass -- as Apple did with the iPhone 4 and iPhone 4s -- will allow the company to stand out from competitors.
«1345678

Comments

  • Reply 1 of 153
    mac_128mac_128 Posts: 3,454member
    My only comment here is that if Apple does deliver on the rumor of the iPhone 7 having minimal cosmetic changes over the 6s, and at most significance offers only a processor and camera upgrade, then removing the 3.5mm jack is going to be detrimental to bottom line sales. If that's actually going to happen, they should save it for the "must have" redesigned iPhone 8 update.
    edited April 2016 baconstangstevenoz1983rcfa
  • Reply 2 of 153
    nolamacguynolamacguy Posts: 4,758member
    Kuo is "noted" by whom, exactly? AI and MR keep saying that, but you never explain where this adoration supposedly comes from -- other than from yourselves, of course. 

    he claims iPhone needs better specs to keep selling? what a load of nonsense. I can't believe even AI doesn't understand why that notion is so wrong-headed. 

    even if iphone does experience decline in sales, that insanely high number will still blow away all others, and suck up all industry profit. as usual.
    edited April 2016 rogifan_newcalipscooter63SpamSandwichirelandration aljustadcomicsjony0magman1979anantksundaram
  • Reply 3 of 153
    rob53rob53 Posts: 3,231member
    I wish there was a law (and enforcement) that protected companies from analysts making comments without any basis in fact, which absolutely will affect the stock market price not just on a daily basis but long term. These analysts have nothing to lose and are never called on any wrong comments by the SEC or any government agency anywhere in the world. People are sued for slander and libel all the time but I've never heard analysts being sued for anything. Unless Kuo has paid informants in every supplier Apple uses, he has no way of knowing what Apple will or won't do. He's only guessing but his guesses are used to swing stock markets prices and are making huge impacts on a company's livelihood. I know nothing will ever be done but this has to stop. 
    caliksecelectrotechjax44ration almagman1979anantksundaramredgeminipahorvaticicoco3
  • Reply 4 of 153
    rogifan_newrogifan_new Posts: 4,297member
    Kuo is "noted" by whom, exactly? AI and MR keep saying that, but you never explain where this adoration supposedly comes from -- other than from yourselves, of course. 

    he claims iPhone needs better specs to keep selling? what a load of nonsense. I can't believe even AI doesn't understand why that notion is so wrong-headed. 

    even if iphone does experience decline in sales, that insanely high number will still blow away all others, and suck up all industry profit. as usual.
    This research note is so laughable. Outside of camera improvements what are others doing that are so mind blowing? 'Wireless' charging? I'm sorry but I don't think someone is not going to buy an iPhone because it doesn't have wireless charging.doesn't really provide any examples but all the rumor sites take his notes as gospel. No doubt the stock will open down tomorrow because of this. 
    SpamSandwichelectrotechration almagman1979anantksundaramicoco3waverboy
  • Reply 5 of 153
    calicali Posts: 3,494member
    Every year.....
    rich gregorypscooter63SpamSandwichbobschlobquadra 610magman1979anantksundaram
  • Reply 6 of 153
    tzeshantzeshan Posts: 2,351member
    The author of this article is trying to fool us.  Why no sales number prediction for number one Samsung?  There are numbers for all other four companies.  
    1983
  • Reply 7 of 153
    jonljonl Posts: 210member
    Guys, go back and read that recent Digitimes rumor to cheer yourselves up. lol
    subbies
  • Reply 8 of 153
    tzeshan said:
    The author of this article is trying to fool us.  Why no sales number prediction for number one Samsung?  There are numbers for all other four companies.  

    Actually he has numbers for Samsung of 320 million.

    Which also shows what a complete idiot (or liar) he is. Surely he must be aware that the ASP for Samsung is in the low $200 range, meaning the majority of their sales are sub $200 (or even $100)  devices. Yet he has no trouble putting up that 320 million number beside Apple as if they are somehow comparable.

    Next he'll be telling us Toyota is selling more cars than Mercedes.
    SpamSandwichelectrotechbaconstangcalipatchythepiratejustadcomicsmagman19791983icoco3waverboy
  • Reply 9 of 153
    Kuo is "noted" by whom, exactly? AI and MR keep saying that, but you never explain where this adoration supposedly comes from -- other than from yourselves, of course. 

    he claims iPhone needs better specs to keep selling? what a load of nonsense. I can't believe even AI doesn't understand why that notion is so wrong-headed. 

    even if iphone does experience decline in sales, that insanely high number will still blow away all others, and suck up all industry profit. as usual.

    Kuo's supposed track record in predicting what will go into future iPhones (when he's not wrong or contradicting himself) now extends to predicting how many iPhone 7's Apple will sell by year's end. And yes, these "analysts" do worship and praise high unit sales volume over profitability, consistently.
    SpamSandwichmejsricelectrotechbaconstangcalijustadcomicsmagman1979
  • Reply 10 of 153
    Anyone have the time to keep track of the predictions and outcomes? I think a website that tracked analysts with a Rotten Tomatoes style rating would be a handy tool. Then, when someone is cited as saying something we could look him/her up and see the track record they have earned.

    Until someone holds analysts accountable in SOME way they can pretty much say anything. This is the internet age, the age of accountability. Why doesn't this exist? Or does it and I'm an idiot (options are not mutually exclusive).

    This happens every time a new iPhone is ready to roll out. Even with the SE you can find articles saying Apple sells out at the same time as it's a disappointment. F'n noise everywhere. 

    Like cali posted... every %^&*() year.....
    electrotechwonkothesanepalomine
  • Reply 11 of 153
    I hope all these speculations are wrong. I upgrade my phone in every two years. However, if Apple is not going to change the design significantly, I will probably skip iPhone 7 and wait for the next version by hoping not 7s but iPhone 8. I am excited about all glass design, I really enjoyed using iPhone 4 with double sided glass. I have started using cases after iPhone 5 because aluminium is easy to scratch.
  • Reply 12 of 153
    SpamSandwichSpamSandwich Posts: 33,407member
    Anyone have the time to keep track of the predictions and outcomes? I think a website that tracked analysts with a Rotten Tomatoes style rating would be a handy tool. Then, when someone is cited as saying something we could look him/her up and see the track record they have earned.

    Until someone holds analysts accountable in SOME way they can pretty much say anything. This is the internet age, the age of accountability. Why doesn't this exist? Or does it and I'm an idiot (options are not mutually exclusive).

    This happens every time a new iPhone is ready to roll out. Even with the SE you can find articles saying Apple sells out at the same time as it's a disappointment. F'n noise everywhere. 

    Like cali posted... every %^&*() year.....
    Google Philip Elmer-DeWitt. He keeps extensive analyst records.
    rich gregoryration althepixeldoc
  • Reply 13 of 153
    robbyxrobbyx Posts: 479member
    Kuo is "noted" by whom, exactly? AI and MR keep saying that, but you never explain where this adoration supposedly comes from -- other than from yourselves, of course. 
    When it comes to analysts, he's by far the most accurate.  That's all. Don't shoot the messenger. 
    baconstangReasonable907bsimpsengatorguydh87roger wade
  • Reply 14 of 153
    robbyxrobbyx Posts: 479member
    rob53 said:
    I wish there was a law (and enforcement) that protected companies from analysts making comments without any basis in fact, which absolutely will affect the stock market price not just on a daily basis but long term. These analysts have nothing to lose and are never called on any wrong comments by the SEC or any government agency anywhere in the world. People are sued for slander and libel all the time but I've never heard analysts being sued for anything. Unless Kuo has paid informants in every supplier Apple uses, he has no way of knowing what Apple will or won't do. He's only guessing but his guesses are used to swing stock markets prices and are making huge impacts on a company's livelihood. I know nothing will ever be done but this has to stop. 
    Grow up. It's an educated prediction. That's what analysts do. You don't have to pay any attention but for those of us who invest, analyst opinions are often useful.  It's not even close to being slander or libel. It's an OPINION.  Sorry you don't like it.  The guy has a decent track record and I'm sure he has plenty of informants. He's in China after all.  It's not some personal attack on your favorite company/religion.  Take the emotion out of it. This is how investing works. There are analysts covering just about every company on the stock market. 
    edited April 2016 gatorguyReasonable907manfrommarsasdasdmr squidcnocbuiwilliamlondonairnerdsingularityroger wade
  • Reply 15 of 153
    tzeshantzeshan Posts: 2,351member
    tzeshan said:
    The author of this article is trying to fool us.  Why no sales number prediction for number one Samsung?  There are numbers for all other four companies.  

    Actually he has numbers for Samsung of 320 million.

    Which also shows what a complete idiot (or liar) he is. Surely he must be aware that the ASP for Samsung is in the low $200 range, meaning the majority of their sales are sub $200 (or even $100)  devices. Yet he has no trouble putting up that 320 million number beside Apple as if they are somehow comparable.

    Next he'll be telling us Toyota is selling more cars than Mercedes.
    He knows the numbers but he chose not to tell us because he will find it hard to explain why Samsung beats Apple so badly.  Then we know the real comparison is the sales numbers of Samsun Galaxy S7 phones.  So the 1% sales for Samsung is meaningless to Apple if it is not Galaxy S7 phones.  Then we know Samsun never reveal sales numbers of Galaxy phones so it can pretend they are real competitors of iPhones. 
    baconstangmagman1979
  • Reply 16 of 153
    tzeshantzeshan Posts: 2,351member
    rob53 said:
    I wish there was a law (and enforcement) that protected companies from analysts making comments without any basis in fact, which absolutely will affect the stock market price not just on a daily basis but long term. These analysts have nothing to lose and are never called on any wrong comments by the SEC or any government agency anywhere in the world. People are sued for slander and libel all the time but I've never heard analysts being sued for anything. Unless Kuo has paid informants in every supplier Apple uses, he has no way of knowing what Apple will or won't do. He's only guessing but his guesses are used to swing stock markets prices and are making huge impacts on a company's livelihood. I know nothing will ever be done but this has to stop. 
    Analysts will be published in the long term if their predictions are always off track.  But this one seems different.  He is able to spy on Apple.  I think this is a failure of Tim Cook failing to patrol Apple employees.  
    roger wadepalomine
  • Reply 17 of 153
    robbyxrobbyx Posts: 479member
    Anyone have the time to keep track of the predictions and outcomes? I think a website that tracked analysts with a Rotten Tomatoes style rating would be a handy tool. Then, when someone is cited as saying something we could look him/her up and see the track record they have earned.

    Until someone holds analysts accountable in SOME way they can pretty much say anything. This is the internet age, the age of accountability. Why doesn't this exist? Or does it and I'm an idiot (options are not mutually exclusive).

    This happens every time a new iPhone is ready to roll out. Even with the SE you can find articles saying Apple sells out at the same time as it's a disappointment. F'n noise everywhere. 

    Like cali posted... every %^&*() year.....
    I think a Rotten Tomatos for analysts site is a great idea. Frankly, it could probably make for a good business. Charge for access. Analysts cover all industries so there would be wide appeal and interest. 

    Analysts are in the prediction/opinion business.  I pay attention to a few Apple analysts because, over time, they have proven themselves somewhat accurate. Plenty are full of **** and I ignore them. Yes, there is a lot of noise, but if you take the emotion out of it, some of these opinions can be useful.

    The problem with fanboy logic is that anything negative is automatically an attack.  Very childish.
    Reasonable907mr squidjosha
  • Reply 18 of 153
    subbiessubbies Posts: 71member
    jonl said:
    Guys, go back and read that recent Digitimes rumor to cheer yourselves up. lol
    Link to the article please?
  • Reply 19 of 153
    jax44jax44 Posts: 79member
    So he predicts as low as 190 Million iPhones sold in Fiscal Year 2016.

    Apple sold 74.8 million in Q1.
    Low estimates are 50 million in Q2.

    So he expects 65 million sold in Q3 & Q4 combined.

    Q3 2015: 47.53
    Q4 2015: 48.05

    The tough compare to Q2 2015 is due to the massive demand for iPhone 6 which constrained supplies into Q2.  This is somewhat of an anomaly.

    Q2 2012: 35.06
    Q2 2013: 37.43
    Q2 2014: 43.72
    Q2 2015: 61.17
    ration alnostrathomas
  • Reply 20 of 153
    blastdoorblastdoor Posts: 3,207member
    For me the key to the iPhone 7 is the camera. If it is a big enough upgrade over the 6+ that I have now, then I'll buy it. If not, I won't. 

    Other than the camera, though, there's no other obvious improvement that would really grab my attention. 
    Reasonable907thepixeldoc
Sign In or Register to comment.