Apple iPhones to struggle the most in 2016: Analyst

Apple may end up among top 5 worst-performing smartphone brands of fiscal year 2016, according to KGI Securities Ming-Chi Kuo. According to Kuo, one of the most widely-known Apple analyst, global iPhone shipments may fall short of analysts'estimates of 210-230 million units in the year 2016.

In a research note, Kuos predicts that Apple will underperform the industry and may end up being the only global smartphone brand among top five to see decline in shipments in the year 2016.

Regarding the reason for falling iPhone shipmnents Kuo wrote, "Given the fact that shipments fell YoY for the first time in 1Q16, we don't think large-screen replacement demand will contribute much to growth. To sustain growth, the iPhone needs to come up with more innovative features to revitalize the user experience, for example in form factor design, software and hardware specs. We don't see many attractive selling points for iPhone 7 in 2H16 and are conservative on 2H16F shipments. While we revise up 2016F iPhone SE shipments from 12mn to 18mn units, this won't offset overall iPhone shipments decline."



"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," Kuo wrote.

He adds, "We believe only iPhone will see shipments fall YoY in 2016, for three reasons: (1) intensification of market competition; (2) time needed for commercialization of new user experience technologies; and (3) iPhone needs a makeover (e.g. form factor design) to keep attracting consumers"



In his note, Kuo goes on to predict that out of Samsung, Apple, Huawei, Oppo and Vivo, only Apple will see shipments fall year-on-year.

In an earlier report last week, Kuo said that Apple will completely redesign its iPhone in 2017. iPhone 8 will (to be released in 2017) will be all-glass and complemented by new curved OLED display.

Incidentally, Kuo is the same analysts who broke the news of iPad Pro, the 4.7-inch and 5.5-inch screen sizes of iPhone 6 and iPhone 6 Plus and revealed iPhone SE.