Analyst: iPhone sales to shrink 3% next year

Shares of Apple (NASDAQ: AAPL) dipped this morning after Morgan Stanley's Katy Huberty predicted in a research note that worldwide iPhone sales will dip by roughly 3 percent next year. Rising prices in overseas markets and increasing smartphone penetration in developed markets will result in fewer iPhone upgrades and will slow new user growth in the near future, Huberty said.

Apple has enjoyed increasing iPhone sales year-over-year since the first generation of the iconic handset was launched in 2007. Apple shares were down 2.4 percent mid-day today following news of Huberty's note.

Huberty said she expects iPhone unit sales to see a boost in September as a wave of iPhone 6 users begins to upgrade and perhaps a new iPhone model comes to market. Meanwhile, Apple's growth is expected to be driven by new offerings such as Apple Watch, Apple Music and Apple TV.

The iPhone accounts for more than half of Apple's revenues, and Apple claimed a dominant 94 percent of the worldwide smartphone market's revenues during the third quarter. Smartphone growth worldwide is slowing, however, and IDC recently estimated 2015 will see the first single-digit growth of the market in history.

Interestingly, Huberty increased her fiscal 2016 iPhone unit growth rate from 3 percent to 7 percent several weeks ago.

For more:
- see this Business Insider article

Related articles:
Apple raked in 94% of smartphone industry's profits in Q3, analyst estimates
Apple sells 48M iPhones, just below Wall Street expectations

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