KGI forecasts 23% year-on-year iPhone growth for Apple’s Q4, falling in following two quarters


An investment note by KGI predicts that Apple will next week report year-on-year iPhone sales up 23.6% to 48.5M, but says that that holiday quarter sales will be down on last year, and that the decline will continue into the first quarter of next year.

KGI says that China is the big factor, included as a launch country this year, and hence contributing to calendar Q3/fiscal Q4 sales, while last year’s China sales fell into the holiday quarter. It estimates that 22M of the iPhones sold last quarter were the new iPhone 6s/Plus. Apple sold 47M iPhones in the previous quarter.

Despite the launch of the iPad Pro next month, both iPad and Mac sales will fall across all three quarters, predicts the report … 

KGI estimates that Apple will report a 9.5% year-on-year fall in iPad sales, and a 1.5% fall in Macs. For these products, Apple may instead choose to highlight quarter-on-quarter sales, where KGI expects rises of 2% and 13.3% respectively.

The company has significantly reduced its opening quarter forecast of iPad Pro sales, from 4-5M units down to 2M units due to supply constraints following quality issues with the Sharp display panel used. Bringing the more expensive Pro into the iPad mix will, however, offset declining shipments, it suggests.

The forecast presents a mixed picture for the stock price. KGI says that the stock will likely fall next week unless the company provides upbeat guidance for the following quarter, but believes that the longer-term outlook is good. Most of the issues it covers are largely already factored into the share price, it says, and the market will soon switch its focus to future growth drivers next year.

Apple will announce its calendar Q3/fiscal Q4 results on 27 October. Its guidance is for revenue in the $49-51B range, with a gross margin of 38.5-39.5 percent.

One number we’re unlikely to hear from Apple is how many Apple Watches it has sold. Tim Cook has so far only said that the company has shipped “a lot” of Watches, and that shipments are growing. Analysts are essentially just guessing wildly.

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  1. rogifan - 7 years ago

    And he’s basing this on?

    • Ben Lovejoy - 7 years ago

      Supply-chain, mostly.

      • Ben-

        The same supply chain that told Kuo that Apple sold 54 million phones in Q3. Oh wait. Apple only sold 47 million phones. The guy was off by almost SEVEN MILLION UNITS. Cook has said time and time again you can’t really on few supply chain data points to get an accurate assessment.

        Why are we giving Kuo the benefit of the doubt when his last estimate was 15% off?

  2. justincirello - 7 years ago

    Apple always has a great holiday quarter. I plan on waiting to see the news of Q3 and hopefully the stock will drop as it usually does after earnings so I can purchase more going into the holiday quarter.

    We will see iPhone sales growth once the iPhone 7 is released. Design changes always sell very, very well.

    • justincirello

      I don’t think you will have a chance. The options market is showing only a 10% chance that Apple drops significantly after earnings. Keep in mind the stock is already about 15% down since July.

      My guess is Apple will provide strong guidance and we will see $120 next week and $140 by end of year. The buying opportunity is now, IMO.

  3. Kuo doesn’t even know that Q4 ends on Sept 26th not Sept 30th.

    That Kuo does not even know that basic information makes everything else he said meaningless

  4. macnificentseven48 - 7 years ago

    Why is it so easy to call ahead of time what Apple will be doing six months from now and yet other companies aren’t being given the kiss of death with such lead time? I know analysts couldn’t possibly have dead accurate crystal balls. I know for a fact that investors often get unpleasant surprises upon quarterly earnings from other companies and they seem to be caught completely unawares. However, Apple shareholders seem to get constant future updates how Apple will be failing in some way or another long before it happens. I happen to believe anything can happen between now and then because I know the future isn’t written in stone. Of course, the share price is likely to fall because Apple is always going to give out some weak guidance to make shareholders take a beating. If it falls, then the whole year will be a total washout for Apple shareholders. What investor in their right mind wants to own a stock that can only lose them money? It seems like Apple is being run to lose share value. For Apple shareholders 2015 has been hell year despite fairly decent earnings plus $140 billion in share repurchases down the toilet. Ay caramba! At least I get my dividends.

    • I agree with all your points except it isn’t Apple’s fault. Its Wall Street manipulators. As a shareholder I wish Apple would go private or at least make the threat that they are exploring options to go private.

      Going private is not a laughable idea. If Apple stops the buyback they could stockpile $400 billion in cash in a few years. Then with shareholder approval all public shares could be converted into private equity held in a trust. That way Wall Street could no longer constantly manipulate Apple’s share price to make profits shorting the stock or selling options.

  5. iali87 - 7 years ago

    Apple sold about 14 millions iPhones 2g on a single carrier in 2007. Now apple sell this amount in a couple of weeks!
    Well done Apple.


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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