KGI is forecasting that iPhone shipments have now peaked for the year and that suppliers will see orders decline by anything from 5% to 15% in November and December. Analyst Ming-Chi Kuo is basing this on a mixture of reduced shipments seen in the supply chain and greater stock availability as supply catches up with demand.

KGI says that it had already factored in declining supply chain orders to its estimate of 70-75M iPhone sales in the final two months of the year, well below consensus estimates ranging from 75-85M.

Kuo says that orders for the 4.7-inch iPhone 7 models had been limited by relatively modest changes from the iPhone 6s. The dual camera of the iPhone 7 Plus had seen greater demand, but KGI believes that the shortage of these models has now ended, noting that they are now shown in stock in most places.

KGI is particularly pessimistic about China, stating that while the run-up to the Chinese New Year had seen greater build-up of inventory, fierce competition makes it unlikely that Apple will expand its market share to any significant degree going into 2017. The investment note was issued on the same day that the Chinese government warned that iPhone sales would suffer if president-elect Trump went ahead with threatened import tariffs on Chinese products.

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