Apple could sell fewer iPhones this year compared to 2014.

KGI Securities analyst Ming-Chi Kuo has forecasted that global iPhone shipments may be lower in 2016 than they were in 2014. If he is right about his predictions, Apple could be among the top five smartphone brands to perform the worst this year.

Three million fewer iPhones could be sold this year than two years ago.

Ming-Chi Kuo, a respected analyst from the Asia-Pacific based financial services group KGI Securities, gathers intelligence from his contacts in Apple’s Asia supply chain. According to a new research note he recently issued, in a worst case scenario, iPhone shipments in 2016 are anticipated to reach a mere 190 million units. This would be an 18 percent decrease in shipment growth and three million fewer iPhones compared to what the company sold in 2014.

Kuo said in his note that even in the best case scenario Apple is anticipated to sell only 205 million units, which would still be an 11.6 percent decrease in growth and five million short of the lower end of analysts’ estimate range, reported MacRumors.

Whether or not the best or the worst case scenario is the end result, it is Kuo’s prediction that Apple will underperform the industry and become the only global top-five smartphone brand to see a decline in shipment this year.

Limited iPhone 7 selling points are one of the key factors behind global iPhone shipments decline.

In his note Kuo stated that “Given the fact that shipments fell YoY for the first time in 1Q16, we don’t think large-screen replacement demand will contribute much to growth.” He added, “We don’t see many attractive selling points for iPhone 7 in 2H16 and are conservative on 2H16F shipments.”

He predicts that out of the leading five smartphone brands (Samsung, Apple, Huawei, Oppo, and Vivo), only Apple will see shipments fall YoY (year-on-year). This suggests to KGI Securities that the drop in iPhone sales cannot be blamed only on industry structure.

Kuo believes that key factors responsible for the expected decline are the slowing market demand for handset replacements with large screens and limited iPhone 7 selling points.

According to Kuo, for Apple to sustain its global iPhone shipments growth it needs to develop more innovative features that will revitalize the user experience, such as in the form of hardware, software and form factor design specs.

Apple’s earnings announcement for the first calendar quarter of 2016 will occur on April 26.

Asia has become the leading force in smartphone ownership

Asia has become the world’s leading market in terms of smartphone ownership, with more consumers choosing to purchase these mobile devices every day. The various economies of the region have been able to outperform other markets, especially in the mobile space and several other sectors. Mobile operators in this region could now have the opportunity to connect with new consumers and disrupt the payments space in a way they were never able to before.

Mobile operators are showing stronger interest in mobile payments and shopping

A growing mobile population has created high demand for mobile commerce services. These services allow consumers to use their mobile devices to shop for and purchase products online and in physical stores. In the past, technology companies and banks had focused on this sector, offering services that were in high demand among consumers. Now, telecommunications companies are beginning to enter into the payment space, with mobile operators leveraging their connection to consumers to establish a foothold in the mobile payments market.

More Chinese consumers are beginning to connect payment cards with their devices

Currently, China, India, and Indonesia are considered markets where smartphone ownership is growing aggressively. Consumers in these countries are also using these devices to pay for products they are interested in. In China, 16% of consumers have credit cards, with 49% having debit cards. These consumers are connecting these cards to their mobile devices, which is enabling them with the ability to pay for products online and in physical stores in a convenient manner.

Mobile operators have the potential to disrupt the payments space

In the coming years, telecommunications companies are likely to play a larger role in the mobile commerce market. These companies have been feeling pressure to provide consumers with services that make mobile payments possible and some have managed to find success in this regard. These companies will compete with other organizations in the mobile commerce market, however, which has become somewhat bloated due to the lucrative nature of mobile payments services.