Apple shares fell more than 2% on Monday morning after analysts released a flurry of reports showing demand for the company’s latest smartphone, the iPhone 16, is lagging behind the model’s launch around the same time last year.
The Street reported findings from analyst Ming-Chi Kuo of Citigroup, Jefferies and TF International Securities, which showed demand for the AI-enabled phone is lower than in 2023.
Kuo, who has accurately predicted Apple’s moves in the past, estimated that the first weekend of iPhone 16 pre-order sales generated about 37 million units, nearly 13% less than the equivalent weekend of last year’s iPhone 15 sales debut. “The main factor is lower than expected demand for the iPhone 16 Pro series,” he wrote in a post Monday.
Earlier this year, Kuo wrote a report stating that iPhone sales will decline by as much as 15% year-on-year in 2024. This is due to a decline in iPhone sales in China, combined with the rise of generative, foldable smartphones with AI. This will put pressure on iPhone sales throughout the year.
Meanwhile, Jefferies noted that some iPhone 16 models are almost immediately available for in-store pickup, suggesting weaker consumer interest. And Citi pointed to increasing competition in China and upgrade fatigue as factors explaining the weaker demand.
Apple’s latest iPhone is a key part of the company’s AI strategy, which focuses on bringing powerful and intuitive new use cases to everyday users. Apple is touting its AI platform, Apple Intelligence, as a key selling point for its latest phones, since the software will only run on last year’s iPhone 15 Pro or later models.
Analysts expect this upgrade incentive to boost iPhone sales and increase stock value.
