Apple shares fell 3.6% today after reports that demand for the new iPhone 16 was lower than expected. The volume of pre-orders for new Apple smartphones in the first week was 12% lower compared to the iPhone 15 in the same period last year. Analysts believe that the main reason for weak pre-sales was the lack of access to the announced Apple Intelligence AI features at the time of the iPhone 16 launch.
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«The key factor is lower-than-expected demand for the iPhone 16 Pro series, says TF Securities expert Ming-Chi Kuo. “The main selling point, Apple Intelligence, is not available at launch to coincide with the release of iPhone 16. Additionally, intense competition in the Chinese market continues to impact iPhone demand.”
Last Monday, Apple unveiled new versions of the iPhone, AirPods and Watch at an event at its headquarters in Cupertino, California. Pre-orders for the new iPhones started on September 13, the new items will become available on September 20, but the first Apple Intelligence features for the iPhone 16 will appear only next month, only in beta version and only in the United States – in other countries Apple’s AI will debut later. In this regard, Barclays, JPMorgan and Bank of America also expect demand for the latest iPhone Pro models to decline compared to last year.
«The total number of pre-orders decreased year-on-year during the first few days, Barclays experts said. “[Orders for] Pro models were down double digits year over year, while base and Plus models were up year over year.”
Barclays analysts believe that the rollout of Apple Intelligence in Chinese until calendar year 2025 at the earliest “could dampen early enthusiasm for the iPhone 16. Weak macroeconomics and competition continue to weigh on iPhone sales in China.” They recalled that a year earlier Apple had to offer significant discounts to improve iPhone 15 sales in China.
JPMorgan analysts noted that “early delivery dates indicate demand for the base iPhone 16 models is in line with the iPhone 15 series during the first week, while early demand indicators for the Pro models are starting with a modest decline compared to the iPhone 15 series.”
Bank of America analysts believe that “while the extended delivery dates may reflect iPhone demand, other factors such as supply, inventory, distribution and pricing may impact delivery times.” It is noted that Apple has already reduced prices for the iPhone 16 in Australia and India.
The iPhone 16 Pro and iPhone 16 Pro Max are Apple’s most expensive phones, with starting prices of $999 and $1,199, respectively. According to Apple, the Pro models feature “by far the best iPhone displays ever” and have “the thinnest bezels of any Apple product.” Apple emphasized that the new phones’ titanium body is nearly half the weight of stainless steel and is “more scratch-resistant than forms of titanium that other [manufacturers] have used.” The company also said the new iPhone 16 Pro Max has “the best iPhone battery life ever,” but did not provide further details.