iPhone sales likely to drop in 2016

According to a recent report by Morgan Stanley, iPhone sales are set to drop for the first time ever in 2016.

An analyst at the firm named Katy Huberty, who worked on the report, is responsible for this prediction. She said that Morgan Stanley thinks that unit sales of the iPhone will decline by 6 per cent during this fiscal year.

Apple has had tremendous success with the iPhone brand since its beginning. The company has seen sales of the phones increase year over year since the launch of the original iPhone back in 2007 which sold 1.4 million units. Even the iPhone 5S was able to increase unit sales despite being an incremental release that did not revolutionise either the OS or the hardware.

In 2015, Apple was able to sell 231 million iPhones in part due to the success of the iPhone 6 and 6S. Morgan Stanley believes that this number will drop to 218 million in 2016. This would be a 5.7 per cent drop in fiscal sales. Huberty had previously estimated a sales number of 247 million for the 2016 fiscal year.

The reason for this drop off in iPhone sales is due to higher prices on the international market and to the way in which smartphone adoption has tapered off now that most consumers who want an iPhone already have one or are planning on upgrading with the next release cycle. If Huberty's prediction turns out to be true it could be quite damaging for Apple's bottom line as iPhone sales account for more than two thirds of its total revenues and profits.

It is not surprising that iPhone sales might decrease after the tremendous success that Apple experienced with the iPhone 6. Since May, the company's stock has declined from $132 per share to $113 where it is now.

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