KGI’s Ming-Chi Kuo – an analyst with an excellent track-record on AAPL – has forecast that year-on-year iPhone shipments will continue to fall this year, and end up well below market expectations. In an investment note seen by 9to5Mac, KGI says that total 2016 iPhone shipments will likely fall below 200M units, and that the iPhone 7 will see lower sales than the iPhone 6s/Plus.

Kuo says that lower-than-expected iPhone 6s/Plus sales showed that replacement demand was falling in developed markets, while new demand from emerging markets has not yet picked up the slack. KGI does not believe that the launch of the iPhone 7 later this year will be sufficiently appealing to see the iPhone return to growth …

The note argues that the iPhone 7 appears likely to adopt a broadly similar form factor to the 6s/Plus, with the only notable upgrade leaked to date being the dual camera expected to be found in the iPhone 7 Plus, limiting its potential appeal. With the feature found only on the larger model, and many competitor smartphones also expected to feature dual cameras – some of them already on the market – consumers could be underwhelmed by the iPhone 7.

We’re still a fair way out at this stage, meaning that Apple could well have surprises in store, but KGI does have excellent supply-chain contacts that have so far revealed no sign of additional new features.

Finally, KGI is also skeptical about a CNBC report that the iPhone SE saw 3.4M retailer pre-orders in China, stating that it was unable to find any evidence to substantiate the number.

The Wall Street consensus is for total iPhone sales of 210-230M, while Kuo believes it will fall within the 190-210M range, with the number likely to fall on the wrong side of 200M.

Apple saw record sales from both the iPhone 6/Plus and the iPhone 6s/Plus as it tapped pent-up demand for larger-screen phones, but there is concern now that this demand has been satisfied, the company may struggle to achieve future growth. I argued earlier this year that ‘peak iPhone’ was likely to be a temporary phenomenon, but that the company might have to think the unthinkable on price – something it subsequently did with the launch of the iPhone SE. If KGI is right, that may not be enough.

FTC: We use income earning auto affiliate links. More.

Check out 9to5Mac on YouTube for more Apple news:

You’re reading 9to5Mac — experts who break news about Apple and its surrounding ecosystem, day after day. Be sure to check out our homepage for all the latest news, and follow 9to5Mac on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our exclusive stories, reviews, how-tos, and subscribe to our YouTube channel

About the Author

Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

Ben Lovejoy's favorite gear