Apple is increasingly becoming a one-trick pony. During the last quarter, about 63% of its sales came from iPhones, up from 56% in the same quarter a year ago. All the other products combined account for just 37% of its revenue. That’s a worrying sign, especially as evidence shows that iPhone sales have been declining. The iPhone 6S and 6S Plus have failed to excite buyers. And now Raymond James analysts say that the iPhone 7 is unlikely to reverse the trend.
FY2016 iPhone sales to drop 10%
Raymond James analysts Tavis C. McCourt and Mike Koban expect Apple to sell 207 million units of iPhone in FY2016, down 10% from 231 million units in FY2015. Many Apple suppliers including Samsung, Catcher, Cirrus, Dialog, Largan, Qorvo, and ADI have officially said that the Cupertino company had cut component orders by up to 70%. But many expected the sales to bounce back with the iPhone 7 that is expected to bring some major improvements.
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So, it came as a big surprise when Raymond James analysts predicted that the iPhone 7 is unlikely to increase the unit sales. The research firm has lowered its EPS estimates slightly. McCourt and Koban said they do expect some growth in 2017, but there will be no major bounce back. The analysts added that the iPhone 8 sales, due out in late 2018, will remain almost flat.
iPhone 7 to bring radical improvements
Raymond James says that the smartphone market is maturing. Also, the iPhone 6 will have a “hangover” effect on the remaining life of the iPhone 6S and into the iPhone 7. Consumer research shows that Android devices have been good at customer retention, which is another cause of worry for Apple. What’s more, analysts expect sales in the US, China and India to falter all at the same time. Earlier this week, Apple sought the Indian government’s approval to open exclusive stores in India.
Recent rumors indicate that the iPhone 7 will be waterproof, have a new processor and wireless charging capabilities. Apple is also planning to do away with the 3.5mm headphone jack in favor of the Lightning port to make it slimmer than any of its predecessors.