Apple Only Top Smartphone Brand To Have 2016 Shipment Decline: KGI

KGI’s Angela Hsiang commented that while iPhone shipments are likely to decline in 2016, other product lines of Apple Inc. AAPL are also unexciting, resulting in a cautious view on the stock.

Global Shipments In 4Q

In 4Q15, global shipments of smartphones were up 10 percent y/y. During the same quarter, global shipments of NB and tablet declined by 7 percent y/y and 20 percent y/y, respectively. Given this weakness, related suppliers are shifting to other businesses, such as server, smartphone, wearable, and networking or industrial PC products, analyst Angela Hsiang said.

“We are most positive on server business due to solid demand from data center expansion,” Hsiang wrote.

Apple’s 4Q Performance

Apple reported flat iPhone shipment growth in 4Q15 due to disappointing innovation for the 6s model. “On the other hand, most leading Chinese OEMs have seen significant shipment growth on overseas expansion,” the analyst pointed out.

Forecasts For 2016

Hsiang forecasted global smartphone shipment growth to decelerate to 5-8 percent, from 14.4 percent in 2015 and 28.5 percent in 2014. “Among the top-five brands, we estimate Apple will be the only one to decline in 2016 on shipments of 190-210mn units, down 9.5-18.1% YoY,” the KGI report stated.

Apple To View Shrinking Demand

Hsiang believes that all Apple product lines would suffer from contracting demand in 2016. She projected a y/y decline in iPhone shipments of more than 10 percent, missing the consensus expectation of 210-230mn units.

“As we are also not upbeat about other product lines in 2016, we take a cautious view on Apple,” Hsiang said.