apple Apple shares fell about 2.8% on Monday, after reports that demand for the new iPhone 16 was lower than expected — and down 12% year-over-year compared to first-weekend sales of the iPhone 15 last year, TF Securities analyst Ming-Chi Kuo wrote in a note.
“The main factor is lower-than-expected demand for the iPhone 16 Pro series,” Kuo wrote after compiling data from Apple’s websites on pre-order sales for each iPhone 16 model, average delivery times, and pre-order shipments.
Kuo added that one of the “key factors” for the weak demand is that “the main selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release. Additionally, the intense competition in the Chinese market continues to weigh on iPhone demand.”
On Monday, Apple unveiled new iPhones, AirPods and the Apple Watch at an event at its headquarters in Cupertino, California. Pre-orders for the new iPhones began Friday and they will launch on September 20, but the first Apple Intelligence features for the iPhone 16 won’t be released until next month, in a beta.
Analysts at Barclays, JPMorgan and Bank of America wrote in investor notes that the shipping times could translate into lighter demand for the latest iPhone Pro models, compared to last year.
“Based on our conversations with distributors and analysis of pre-order numbers on major Chinese e-commerce sites, total pre-order units were down year-over-year in the first two days, with Pro model mix declining,” Barclays analysts wrote in a note. “We heard Pro model units were down double-digit year-over-year, while base and plus models grew year-over-year.”
Barclays analysts added that Apple Intelligence in China “will not be available until 2025, which could dampen early enthusiasm for the IP16. Weak macroeconomics and competition continue to weigh on iPhone sales in China.” They also wrote that Apple had to rely on heavy discounts to help iPhone 15 sales in China.
Tracking delivery times in key markets as an indicator of demand, JPMorgan analysts wrote that “early delivery times suggest demand for the base iPhone 16 models is in line with the iPhone 15 series during the first week (i.e., pre-order week), while early demand indicators for the Pro models start out slightly weaker relative to the iPhone 15 series.”
Bank of America analysts wrote that after tracking iPhone shipping dates on Apple's website and various carrier sites, shipping times “for the iPhone 16 Pro and Pro Max models are extended, but somewhat slower (on average) than last year at this point in the pre-order cycle.”
“While extended shipping times could reflect demand for iPhones, other factors such as supply, inventory, allocation, and pricing could impact shipping times,” they added. The analysts also wrote that Apple has cut iPhone 16 prices in Australia and India.
The iPhone 16 Pro and iPhone 16 Pro Max are Apple's premium phones with better displays and cameras than the regular models, starting at $999 and $1,199, respectively.
Apple said at its event last week that the Pro models have “the thinnest bezels ever on an Apple product,” and called them “the best iPhone displays ever.” The titanium is roughly half the weight of stainless steel and is “more scratch-resistant than other forms of titanium that others have used.”
The company also said during the event that the new iPhone 16 Pro Max has “best battery life ever” but did not provide additional details.
— CNBC's Michael Bloom contributed to this report.
