Anamika Dey, editor
Brief news
- Ming-Chi Kuo reported a 12% decline in iPhone 16 demand compared to iPhone 15, leading to a 3.6% drop in Apple shares.
- Analysts noted lower pre-order sales for iPhone 16 Pro models, attributed to the absence of key features and strong competition in China.
- Despite extended shipping times for Pro models, demand indicators suggest base models are performing similarly to last year’s iPhone 15.
Detailed news
Ming-Chi Kuo, an analyst at TF Securities, reported that the demand for the new iPhone 16 is lower than anticipated and has declined by 12% year over year from the first-weekend sales of the iPhone 15 last year. Consequently, Apple shares experienced a 3.6% decline in Monday morning trading.
After compiling data from Apple’s websites on each iPhone 16 model’s pre-order sales, average delivery timeframes, and shipments before pre-order, Kuo concluded that the primary factor is the lower-than-anticipated demand for the iPhone 16 Pro series.
One of the “key factors” contributing to the decrease in demand, according to Kuo, is the absence of the “major selling point, Apple Intelligence,” at the iPhone 16 launch. Furthermore, the demand for iPhones is still being influenced by the fierce competition in the Chinese market.
Apple held an event at its headquarters in Cupertino, California, on Monday to introduce new iterations of the iPhone, AirPods, and Apple Watch. The initial Apple Intelligence features for iPhone 16 will not be released until next month, in a beta version. Pre-orders for the new iPhones commenced on Friday and will be available for purchase on Sept. 20.
In their investor notes, analysts at Barclays, JPMorgan, and Bank of America also suggested that the newest iPhone Pro models may experience a lower demand than they did last year due to the longer delivery periods.
According to a note from Barclays analysts, the total number of pre-order units decreased year-over-year within the first few days, with a reduced proportion of professional models, as indicated by their discussions with distributors and analysis of pre-order figures on major Chinese e-commerce sites. “We were informed that the number of pro model units was down by double digits on a year-over-year basis, while the base and plus models experienced year-over-year growth.”
The Barclays analysts further stated that the Chinese language version of Apple Intelligence will not be rolled out until CY2025, which may reduce the initial enthusiasm for IP16. The sales of iPhones in China are still being affected by competition and weak macroeconomic conditions. Additionally, they stated that Apple was compelled to offer substantial discounts in order to boost iPhone 15 sales in China.
In their analysis of the delivery lead times of key markets as a demand indicator, the JPMorgan analysts stated that “early lead-times are indicating demand for the iPhone 16 base models in-line with the iPhone 15 series during Week 1 (e.g., Pre-Order Week), while early demand indicators for Pro models are starting off modestly softer relative to the iPhone 15 series.”
According to analysts at BofA, the iPhone 16 Pro and Pro Max models are experiencing an extended ship time, although it is slightly less than last year at this stage of the pre-order cycle, as a result of monitoring the ship dates on Apple’s website and various carrier websites.
They further stated that “although the extension of ship dates may be indicative of iPhone demand, other factors, including supply, inventory, allocation, and pricing, could be influencing the ship dates.” Additionally, the analysts reported that Apple has decreased the prices of the iPhone 16 in India and Australia.
Starting at $999 and $1,199, respectively, the iPhone 16 Pro and the iPhone 16 Pro Max are Apple’s more premium phones, featuring superior displays and cameras in comparison to the standard variants.
Apple stated at its event last week that the Pro variants have the “thinnest borders on any Apple product,” and that they are “by far our best iPhone displays ever.”. The titanium is “more scratch-resistant than other forms of titanium that others have used” and is nearly half the weight of stainless steel.
During the event, the company also stated that the new iPhone 16 Pro Max has “the best iPhone battery life ever,” but did not provide any further information.
Source : CNBC News
