Apple shares fell more than 2% in morning trading Monday, after a series of analyst reports suggested that initial demand for the company’s latest smartphone, the iPhone 16, is lagging behind when last year’s model was released around the same time.
The Street reported findings from analyst Ming-Chi Kuo of Citigroup, Jefferies and TF International Securities that demand for the AI-powered phone is weaker than 2023 levels.
Kuo, who has accurately predicted Apple’s stock in the past, estimated that the first weekend of preorders for the iPhone 16 brought in about 37 million units, down nearly 13% from the equivalent weekend of the iPhone 15 sales launch last year. “The key factor is the weaker-than-expected demand for the iPhone 16 Pro series,” he wrote in a post published Monday.
Earlier this year, Kuo penned a report that said iPhone shipments would decline by up to 15% year-over-year in 2024, driven by a decline in iPhone sales in China coupled with the emergence of foldable and generative AI-powered smartphones, which will put pressure on iPhone sales throughout the year.
Meanwhile, Jefferies noted that some iPhone 16 models are available in stores almost immediately, suggesting weaker consumer interest. And Citi pointed to increased competition in China and upgrade fatigue as factors behind the decline in demand.
Apple’s latest iPhone model is a key part of the company’s AI strategy, which aims to deliver powerful and intuitive new use cases to everyday users. Apple is touting its AI platform, Apple Intelligence, as one of the biggest selling points of its latest phones, as its software will only run on last year’s iPhone 15 Pro or newer models.
Analysts are counting on the upgrade incentive to reinvigorate iPhone sales and boost the stock’s value.
