For the first time ever in iPhone history, sales are predicted to drop in 2016, according to a note to investors issued by Morgan Stanley analyst Katy Huberty. The report comes just seven weeks after the same analyst elevated Apple to Morgan Stanley’s “Best Idea” list based on Apple’s forward-looking statements and her sources regarding iPhone sales. This is quite an interesting turn of events (via Business Insider).
Citing rising international prices and smartphone market saturation in developed markets, Huberty expects iPhone sales to drop by nearly 5.7% in fiscal 2016. To put that into context, the same surveys showed iPhone sales rising 6.8% in fiscal 2016.
Anyways, Apple still remains a Morgan Stanley “Best Idea”, but considering iPhone sales account for about two-thirds of Apple’s revenue, the news has every possibility of triggering an avalanche of “Apple is doomed” reports.
Huberty was joined by Jazmine Lu, who covers the Asian supply chain for Morgan Stanley. As cited by Fortune’s Philip Elmer-DeWitt, Lu’s iPhone component order estimates have been cut by 10% in the December quarter and by 20% in March, suggesting that iPhone demand is lower than Apple expected two months ago.
On the other hand, this could be also due to robust inventories, Huberty added, and if sales in China meet her forecasts, the lower estimates leave room for “upward revision”.