Apple is cutting orders for the components to build iPhones because of weak demand for the new iPhone 6S, according to a new report by Credit Suisse.
But a potential miniature iPhone, rumoured to be released early next year, could help boost iPhones sales, Credit Suisse says in the report.
Credit Suisse says its Asia Tech Team has confirmed that Apple’s has recently lowered its orders from suppliers, and that Apple now plans to build 70 million to 75 million iPhones in December and 45 million to 50 million iPhones in March.
That’s lower than what Wall Street has been expecting and point to a “subdued” iPhone cycle for the next few quarters driven by weak demand for the 6S, Credit Suisse says.
In a previous report, Credit Suisse blamed the softer demand for the iPhone 6S on the lack of apps that really take advantage of the phone’s new “3D Touch” feature.
But not all is lost, Credit Suisse says: People who have iPhones tend to keep them, and Apple’s new iPhone instalment plan program will put it into the hands of more people than ever before.
In fact, Credit Suisse expects that “over time,” the iPhone install base will hit 615 million users, thanks to Apple’s aggressive efforts in growing that business. In its most recent earnings report, Apple announced it had sold 48.05 million iPhones.
Plus, if Apple follows through with the rumours and releases a smaller, lower-cost four-inch-screen iPhone in the first half of next year, Credit Suisse says, it could open up the market and make the device appealing to a larger audience.
The mini-iPhone could add 62 cents a share to Apple’s bottom line in calendar year 2017, Credit Suisse reckons, and could drive iPhone unit shipments to 265 million in the long term.
And unlike what happened with Apple’s iPhone 5C flop, a smaller iPhone would be enough unlike the current flagship 6S that it wouldn’t confuse the market, according to the analysts.
Get THE MID-YEAR SMARTPHONE MARKET REPORT now! A comprehensive look at the global smartphone market from BI Intelligence by platform, vendor, country and more. Insights into the power struggles between the biggest platforms and the underdogs. Get the Report Here »
Business Insider Emails & Alerts
Site highlights each day to your inbox.