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R.I.P iPhone? First-ever sales decline in 2016, predicts top analyst

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iPhone 6S and Force Touch 19

If there’s one thing Apple knows how to do, it’s selling smartphones by the truckload. But will that always be the case?

Apple’s yearly iPhone sales will fall in 2016, according to a top industry analyst.

That would mark the first drop in sales since Apple began selling its flagship product in 2007.

The prediction comes courtesy of Morgan Stanley’s chief financial analyst Katy Huberty.

Huberty released a note to investors suggesting Apple would see a 6% fall in sales over the 2016 financial year.

That equates to 2.9% in the 2016 calendar year, as noted by Business Insider.

Here’s a chart (via Statista) that shows the iPhone’s rise to success so far:

statista

Related: iPhone 7 news

According to Huberty, Apple will sell 218 million iPhones in the next financial year.

The fall, she explains, will be caused by “higher prices in international markets (ex-China) and maturing smartphone penetration in developed markets weighs on upgrades and new user growth”.

With more people owning smartphones than ever before, there’s limited scope to keep increasing sales.

After all, it’s predicted that there will be 6.1 billion smartphone users by 2020, according to Ericsson’s 2015 Mobility Report.

What’s more, Apple is also having to compete with a growing roster of formidable mid-range handsets.

Tell us what you think of the analyst's prediction in the comments below.

Old Developer

December 14, 2015, 4:44 pm

Katy Huberty's record on predicting Apple sales is the worst among the leading analysts. She has be so wrong so often that she should give up on her predictions on Apple sales. In a survey of eight of the top analyst last September, Huberty was rated the worst based on her lack of ability to estimate the company's quarterly and yearly sales of anything much less iPhones.

mark choletti

December 14, 2015, 4:54 pm

All it needs is an economic downturn, and things will slide. Apple iphone sales have either peaked this year or will peak in 2016. The year 2017 will definitely see a decline in sales across the board for all manufacturers.

mark choletti

December 14, 2015, 4:56 pm

Just look at the chart, factor in the business cycle and a severe economic downturn either in 2016 or 2017, and Huberty will be correct.

The only thing manufacturers of smart phones have going for them is the contract periods for smartphones, as people naturally replace their old unit for a new one once the contract ends.

Old Developer

December 14, 2015, 5:06 pm

And how does this affects her past record of being wrong consistently about Apple's sales? I have heard arguments like yours before in 2009 and iPhone sales only doubled in the down turn of 2008-9 and doubled the next year in the recession.

mark choletti

December 14, 2015, 5:25 pm

You make a valid point about 2008/2009, but when you look at that chart -- sales can't keep going up, year in year out. That's statistically impossible. Confidence was restored in the last severe downturn of 2008/09 thanks to the world central banks doing a massive round of quantitative easing, to the tune of 50 trillion dollars, so that kept the party going, so to speak. Next time, there will be no-one to bail out the Central Banks, although some have speculated that the IMF will. We shall see.

Old Developer

December 14, 2015, 5:44 pm

She is predicting a 6% fall in sales in 2016. That isn't going to happen. The Fed is going to continue pumping the money supply as it always does in an election year like 2016. 2017 might see problems but not 2016. Apple isn't going to have a 6% decline in iPhone sales in 2016 and I don't think that they will see a decline in numbers even in 2017. There surely will be a leveling off of growth in the future but not a decline if for no other reason than the replacement cycle of smartphones.

coldspring22 .

December 14, 2015, 11:38 pm

Kantar's most recent market report says iphone 6S is selling 25% less than iphone 6 did for same period. That's not doom and gloom however, because it might mean that people are still buying more iphone 6 rather than 6S. However, it does mean that iphone 6S is not the big driving factor for sales that iphone 6 was last year.

melci

December 15, 2015, 8:20 am

"Statistically impossible"? Sorry Mark, but that statement is FUD pure and simple. With under 20% smartphone market share, there is plenty of room for iOS to grow.

There are 800 million active iOS users worldwide (5-600 million active iPhones) and with Apple's new 12 month upgrade encouraging many more users to upgrade their iPhones every year instead of every two years, that is a lot of potential upgraders.

melci

December 15, 2015, 8:25 am

"R.I.P. iPhone"?

Come on Sean, that's really pushing the yellow journalism a bit far don't you think? (or was that your editor pushing silly headlines on you to grab the eyeballs?)

Even if Apple iPhone sales dropped 6%, that is still well over a quarter of a Billion iPhones sold in one year. Do you really think that would drop to zero any time soon?

Of course it wouldn't. Apple's 1 Billion active iTunes/App Store users are far too embedded in Apple's iOS platform and vibrant ecosystem to all of a sudden desert.

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