KGI predicts zero or negative growth for next iPhone, citing weak Chinese economy and limited appeal of Force Touch


KGI – which has an excellent track record – has predicted a strong possibility of either zero or negative growth of iPhone sales in Q4 2015. The investment note cited by Taiwanese site Apple Daily (via GforGames) forecasts that Apple will sell between 65M and 75M iPhones, compared to 74.5M in the same quarter last year.

We predict iPhone 6S and iPhone 6S could be the first S-series models to see flat or lower shipments versus their predecessors.

KGI bases its pessimistic prediction on two factors. First, the weak state of the Chinese economy. Second, the very same argument I made in my opinion piece yesterday: that the headline feature of the iPhone 6S, Force Touch, doesn’t seem likely to wow customers … 

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No killer application created by Force Touch as yet. Force Touch has already been used in Apple Watch and MacBook without prompting strongly positive market feedback. We are, therefore, not certain whether it can provide sufficient appeal to shore up shipments momentum of the new iPhone models to be launched this year.

This echoes what I wrote yesterday:

For the last couple of S models, Apple has offered pretty convincing reasons to buy: the 4S gave us Siri, and the 5s introduced Touch ID – both appealing features that were easy for non-tech customers to understand.

[But Force Touch isn’t], I think, for the average user. ‘Will make it easier to use iOS’ isn’t much of a sell when viewed alongside ‘Talk to your iPhone’ and ‘Unlock your iPhone with your fingerprint.’

The KGI note also says that Apple recently reduced its orders for the iPhone 6S – though by just 1%, so not in itself the most persuasive of evidence.

It does, of course, remain possible that Force Touch will prove more appealing once people have tried it – or seen it demonstrated by friends. But as Mark Gurman yesterday exclusively revealed, it will primarily be used as a shortcut to existing features rather than enabling new functionality. We first reported that Force Touch would be coming to the new iPhone back in May.

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  1. rogifan - 7 years ago

    This makes no sense. A huge chunk of the install base has not upgraded to 6 yet. Does this analyst expect them to stay on the 5/5S forever? Also the new plans from carriers (at least in the U.S.) allow people to upgrade earlier. I know T-Mobile has a deal for 6 owners to upgrade to the 6S. The Next plan I’m on with AT&T allows me to upgrade every year. Verizon is now going all installment plans. I think it’s a mistake to assume the new phone is going to be a snoozer before it’s even been announced.

    • Atlas (@Metascover) - 7 years ago

      The part of the user base that is going to install is probably smaller than the number of people who bought their first iPhone with the 6.

    • Ben Lovejoy - 7 years ago

      Nobody expects them to stick with the 5/5S forever – it’s a question of whether the 6S is sufficiently appealing to prompt them to upgrade this year rather than next.

      • rogifan - 7 years ago

        What would make is sufficiently appealing?

    • Walter Tizzano - 7 years ago

      Some people didn’t update because they don’t want a HUGE phone, and iPhone 6S is not gonna change their minds; iPhone 6C could, but apparently won’t be released soon.

      • twelve01 - 7 years ago

        The 6 is mostly inline (and/or the small side) based on today’s standard sizes. I’d bet there is a lot less demand for smaller 4inch phones than comments on Apple sites would have us believe. The fact is, Apple got its biggest bump by switching to the larger size. Those that haven’t upgraded are probably still on contract or their current iPhone works good enough.

    • Rich Davis (@RichDavis9) - 7 years ago

      Some may opt for just buying a lower priced 6/6+ after they drop the price and release the 6S/6S+ (or whatever they call it).

      • rnc - 7 years ago

        Still an iPhone that Apple sells, right?

    • mpias3785 - 7 years ago

      I see a sharp drop in iPhone sales this year in the US due to AT&T and Verizon dropping subsidies and increasing costs. It’ll be almost $1000 out of pocket for a 128GB 6s with Applecare+. I may keep my 5s for another year or two.

      • rogifan - 7 years ago

        Why? They’ve just gone to installment plans. No one is forced to pay the full price of the phone up front.

      • twelve01 - 7 years ago

        Those so-called subsidies will be replaced by another carrier gimmick designed to get users to switch carriers and or upgrade phones.

      • mpias3785 - 7 years ago

        According to AT&T, I’ll be paying an extra $20-30 a month. Not insignificant.

      • rnc - 7 years ago

        If carriers drop subsidies, doesn’t matter.

        If carriers don’t want, there’s a ton of companies that would be interested in do the financing.

      • I don’t think you understand how the installment plan works. Although you will pay a monthly installment fee on top of your plan, the price of the plan will decrease since it no longer has a subsidy factored in. Your still going to pay about the same every month though. I haven’t had a contract w/ AT&T for a while and get a $15 discount p/month.

      • mpias3785 - 7 years ago

        Fer Guzman (@OtiumOtiosum), I’m just going by what AT&T told me a few months ago when they first announced they were dropping subsidies. They do tend to change things often so I’ll talk to them again before I make any decisions. I still have to the end of September until my contract runs out.

    • Agreed about all the 5S (and still some 5) owners looking to upgrade. That’s a huge number of people. I also wonder if there will be some small trickle effects of people with T-Mobile and other no-contract plans looking to upgrade early. It seems very common for people to sell back their old phones to pay for a new one. That’s what I’ve done with my iPhone 4 and 5. Presumably, if selling after 1 year, the resale value is higher. Even if just another $100, it seems possible that, if on the right kind of phone plan, one could upgrade every year for $200-$300. For many people, this may seem like a reasonable price to have the latest device.

      If we see evidence that T-Mobile customers upgrade more frequently, then it might serve as evidence of what might happen when Verizon forces everyone to purchase phones outright (or get on an installment plan). It’s possible the upgrade cycle could speed up, rather than slow down.

  2. macnificentseven48 - 7 years ago

    With Apple, Wall Street always assumes Apple’s next product is going to be a failure to at least some degree. I don’t know why they simply don’t wait before passing judgment. Tim Cook had told the analysts that there were still plenty of iPhones to be upgraded but Tim Cook is always ignored. If it was Jeff Bezos or Elon Musk they’d be believed but not Tim Cook because they think he’s a stupid weenie.

    • taoprophet420 - 7 years ago

      He said only 20% users has upgraded to the 6’s. That’s why the 90 million u its this years sounds very doable to me.

  3. AeronPeryton - 7 years ago

    Are those the exact same scare-words they used for the Apple Watch?

  4. wpcrumbley - 7 years ago

    This article basically implies that no one cares about the improvement to 12-15 megapixels, increased speed, & I’m sure bigger battery. I guess those features are garbage. It is hilarious every year people say the new apple product will be down in sales. The only product that is down is the iPad and Tim Cook says that’s because it was the fastest selling product to 100 million units in history, so when you sell that many products that fast of course you will have correction.

  5. pdoobs - 7 years ago

    isn’t the par for the course for analysts with the “s” models? “oh it looks the same, people aren’t going to upgrade,” and then the “s” models typically blow the doors off the previous model. sure maybe nobody cares about forcetouch but if this thing has a higher megapixel camera i’ll probably upgrade. 8mp is fine but it really limits your ability to crop photos.

  6. John Evos - 7 years ago

    6s sales will exceed all expectations. Double the ram, higher download speeds, longer battery life……touch force is in its infancy……touch id and Apple Pay continue to grow…….ios9……better Siri interactions……

    Yes, of course appppppppppppple is doooooooooooooooomed………./s

  7. mahmudf2014 - 7 years ago

    Apple never sold an iPhone more than they did with the 6 & 6 Plus and that was mainly because “the bigger screen” So KGI is right, and they have excellent track record to date, they know most of the things much better than us. Also, i know most of the iPhone owners that i know bought the iPhone 6 even if they had the 5s. And when i ask them, they don’t mind upgrading to 6S. Why? No new design and 12MP camera won’be enough to convince them to pay 649$ or even more for more capacity. And also i love to have 2GB RAM on my iPhone or 4K video recording, some iPhone owners don’t care about technical details like Android users. So numbers will go right back to usual. Let’s have this chat after a year, before the iPhone 7 introduction and see who is right :) Signed by to-be iPhone 6S owner

  8. Isitjustme - 7 years ago

    KGI is only good at predicting hardware and even then sometimes they failed.

    So let’s see what the outcome is s before thrown my in the hat of failure.

    Whatever you had written about force touch has nothing to do what Text u later, busy the perception of the new users so let’s see whether you will be eating crows for dinner.

  9. b9bot - 7 years ago

    Yea bla,bla,bla, same old story like every year. Apple still has record sales in the end. Keep pushing your stupid negative stories all you want. Apple prevails in the end every time.

  10. llekyamer - 7 years ago

    So according to this guy apple should close shop and stop selling anything because it has to be more everytime than last time. So if I made 15 billion in profit last time it has to be 16 billion this time, if it is the same I’m a failure. I have never understood this. They make a huge profits every quarter, what does this guy make.

    • The post says iPhone sales might stagnate, which means no growth, which is bad news for investors since the iPhone is more than 60% of apple’s revenue, so yes, if apple doesn’t increase sales it matters to stockholders.

  11. drhalftone - 7 years ago

    Force touch sucks.

    • drhalftone - 7 years ago

      I’m sorry. Someone is going to see that think I’m serious. I think Force Touch is the coolest thing ever, and I regretted that my MCP 2011 didn’t die when it did because then I could of held out for force touch in the latest MBPs.

  12. rashmosh - 7 years ago

    These analysts are not taking into account that first of all, a 4″ aluminium iPhone 6c could be exactly what all those “just the right screen size”-zealots have been holding out for. A large chunk of iPhone users still on the iPhone 4, 4s, 5 or even 5c or 5s are hesitant to upgrade solely to the fact that they don’t want a larger screen on their phone, or at least a larger device footprint. If the iPhone 6c is indeed released, with a premium build, a lot of these might be persuaded to switch. Also, although the Chinese economy is experiencing uncertainty and some level of turmoil, and the US dollar is currently also a bit stronger than it should optimally be for Apple, the Chinese market of iPhone buyers have not exactly been those who are struggling to put food on the table. My guess is that while still will still impact Apple, and they will surely fall short of the 90M goal, we are absolutely going to see some growth. I go into greater detail on this subject over at NinjaTeched, at

  13. I have 4S and I’ll be upgrading. Don’t forget about those users.


Avatar for Ben Lovejoy 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!

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