9to5Mac reports that Kuo issued the warning in a research note. The report predicts that Apple will become the only top-five smartphone brand to see a decline in sales this year.
If the market reacts exceptionally poorly to the iPhone 7, Apple may ship only 190 million handsets, less than the 193 million sales of 2014. Even if things go well, Kuo expects Apple to ship only 205 million iPhones, well below general expectations of 210 million to 230 million.
In the worst case scenario, Apple could see iPhone sales decline as much as 18.1 percent. Market leader Samsung is expected to grow 1 percent while Chinese brand Oppo, currently fourth in the world, could rise 51.1 percent.
The report is notable as it comes from Kuo and KGI Securities, one of the top Apple analysts. Kuo has a proven track record for leaking product details ahead of time and predicting the company’s fortunes.
In the report, he claimed the iPhone 7 is not an “attractive” upgrade from the iPhone 6 or 6s, making it likely that consumers will skip this generation. The company is said to be planning a much more exciting handset for 2017, potentially skipping the iPhone 7s to launch the iPhone 8 next year.
Apple is rumoured to be building an all-glass iPhone with an AMOLED display. The design would take the company back towards 2010’s iPhone 4, offering something new to customers tired of the curved aluminium of today’s models. This won’t be introduced until next year though, leaving Apple without any major innovation for 2016.
The iPhone 7 is likely to be a more incremental upgrade than usual, including only minor new features that are unlikely to appeal to the broad range of consumers that a new design attracts. Besides the usual performance tweaks, there’ll be a better camera, longer battery life and wireless charging, a first for the iPhone. The final standout feature will be the removal of the 3.5mm headphone jack, a decision that fans that may be reluctant to accept.
According to Kuo, the iPhone “needs a makeover” if it is to continue its sales success of the past eight years. Without any major new features to come this year, Apple may be left reliant on 2017’s iPhone to resurrect a predicted decline in shipments.
Apple’s market share is being increasingly impacted by the rise of Chinese smartphone brands such as Huawei and Xiaomi. The brands are already popular in their native market, selling feature-filled phones at considerably lower prices than Apple, and are now rapidly expanding out of Asia, posing a problem to Apple and the iPhone.
