Apple's iPhone sales have been on a decline this year, and that trend is likely to continue next year as well. If KGI Securities' analyst Ming-Chi Kuo is to be believed, then Apple's sales in the first and second quarter of 2017 will continue to decline, falling short of how it performed in the same quarters in 2016. Kuo blamed the second quarter decline on Apple's decision to not refresh the iPhone SE next year.
Apple's iPhone marks its tenth anniversary next year, and the Cupertino is keeping things minimal but significant rather than going all out. The iPhone 8 is expected to pack major upgrades; however, Kuo claims that the company will give the next version of iPhone SE a complete miss.
"Shipment volume in 2Q16 came in higher than expected thanks to upbeat demand for the iPhone SE. However, in order to keep gross margin at a high level and to avoid cannibalisation of high-end models, we do not expect Apple to launch an upgraded iPhone SE in 2Q17. Without contribution from a new model, we forecast total iPhone shipment volume will reach 35-40mn units and fall YoY in 2Q17, lower than the 40.4mn units in 2Q16," 9to5Mac quotes Kuo as stating in his note to investors.
The analyst also notes that this decision is mostly influenced through Apple's effort to keep the gross margin high and minimise cannibalisation of high-end flagships like the iPhone 7. While Kuo seems certain that there will be no iPhone SE refresh next year, he did not provide any clarity on when (and whether) Apple plans to update. The iPhone SE was launched in March this year, and helped Apple garner a lot of sales this year. It remains unsure what update cycle will Apple adopt for the iPhone SE range.
In any case, Kuo is not that positive on iPhone 7 sales in 2017 first quarter, claiming that the shipment volume in that time frame will be 40-50 million units, much lower than 51.2 million units that were shipped in first quarter of 2016. Most of this sales decline is attributed to the lack of demand of the 4.7-inch iPhone 7.
However, Kuo comes bearing some good news as well, and claims that even though the first two quarters next year are said to see a decline in sales, Apple will more than make up for it after the launch of its iPhone 8 smartphone. The smartphone, based on preliminary rumours, is expected to sport an OLED display panel, come in three variants instead of two, sport an optic fingerprint recognition technology, and have an all-glass casing.