Barclays analysts have disclosed that Apple has recently decreased the production of the iPhone 16 by three million units. Supply chain assessments indicate that these reductions were implemented at a significant semiconductor partner responsible for iPhone orders.
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Barclays: Apple iPhone 16 demand looks weak, and so will the stock. pic.twitter.com/0867NJTiKq
— Brian Sozzi (@BrianSozzi) October 1, 2024
Barclays analysts suggest that iPhone 16 shipments are expected to decline by 15% year-over-year. Despite this, the performance for the previous quarter aligns with expectations.
The report mentions that the September quarter will see 51 million iPhone 16 units shipped, benefitting from two extra days of sell-through compared to the iPhone 15 models.
Looking ahead, the December quarter presents more challenges. The production cut, coupled with reduced demand, puts iPhone 16 shipments at greater risk.
Analysts believe this slowdown may be tied to Apple’s rollout of Apple Intelligence, the company’s new AI features, which have yet to fully launch.
This delayed Apple Intelligence rollout is also expected to contribute to the softer demand. This is notable because the new models (especially the Pro models) have barely anything different in appearance, aside from the new Capture button of course.
The gradual release of Apple Intelligence appears to be a key factor in the reduced demand. The company launched iOS 18.1 Beta with Apple Intelligence for the iPhone 16 in mid-September, but the delay in delivering the full set of features could have contributed to a “softer” reception from consumers.
Barclays analysts noted, “We think Sep-Q iPhone units are on track for 51M as the best case (consensus and Barclays both at 51M for Sep-Q estimate), assuming some channel fill in line or better vs. last year due to more selling days. We believe July and August sell-through has been flattish Y/Y.”
Another challenge for Apple is that the full Apple Intelligence feature set may have limited availability outside of the U.S., potentially impacting global shipments. In addition, the lack of significant design innovation could also be influencing weaker demand.
Tim Long from Barclay’s on CNBC talking about iPhone 16 failed launch is STONED. Look! His face says he is on drugs! It’s not the lighting,his facial mannerisms and eyes. Great representation from Barclay’s. I guess that is how all analysts gotta be in this market. pic.twitter.com/x75u8PHdrG
— The KIng of Bastiches (@The_DrDoom) October 2, 2024
While the iPhone 16 and iPhone 16 Plus received a new camera layout, the iPhone 16 Pro and Pro Max models look very similar to their predecessors.
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