Apple iPhone 7 Sales Hide A Serious Problem

What if people fall out of love with the iPhone and stop buying Apple’s smartphone? With so much of Apple’s business built around the handsets, any sustained fall in sales would not be welcome inside Cupertino. Unfortunately for Apple the evidence points to just that scenario.
With Apple declining to reveal how many iPhones were sold over the first weekend, it has been left to analysts and marketers to work with third-party data and come up with an answer. The ever-reliable Ming-Chi Kuo at KGI Securities has been looking at the volume of smartphone shipments to provide the geekerati with the latest data point.
Kuo’s data matches with those available from other sources using different methodologies. The iPhone 7 Plus sales are better than expected, but the overall volumes are being dragged down by lower shipments of the smaller iPhone 7.


 Apple iPhone 7 (image: Ewan Spence)

As noted previously on Forbes, Tim Cook and his team have been doing their best to dampen down expectations around the first weekend of sales of the latest smartphones. Online sales through the Apple website were not shipped during the opening weekend, network partners had less stock to sell and it was almost impossible to walk up to an Apple Store on launch day and pick up a handset without a pre-order.
Every launch is different and every launch will have something that dilutes the power of a direct comparison. But it’s unlikely that this launch is significantly different to others. Analysts know this and make corrections in their work. Kuo’s track record is exemplary both in predicting new hardware and SKU differences, and in dealing with shipment numbers. The various data sets are all pointing to a similar conclusion around the weaker historical performance of the iPhone 7 and iPhone 7 Plus.

Apple iPhone 7 (image: Ewan Spence)

Even taking into account the short-term considerations, Kuo is estimating the total volume of 2016 shipments of the new iPhone 7 family be in the 70 to 75 million range. That’s slightly higher than his previous estimates of 65 million handsets, which Kuo puts this down to the attractive dual-lens nature of the iPhone 7 Plus and Samsung’s teething troubles with the rival Note 7 phablet bringing in more consumers. In a direct comparison to the iPhone 6S and 6S Plus sales to the end of the launch year, the iPhone 7 family numbers are lower.
The iPhone 7 and iPhone 7 Plus are selling in numbers that any other smartphone manufacturer would desire, but the trend that Apple revealed back in its Q1 2016 earnings call is continuing. We are past peak iPhone, Apple’s smartphone sales are falling.

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