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'Extremely Concerning': Red Flags Everywhere For iPhone 16 Sales Numbers
- iPhone 16 sales are down almost 13% from last year's debut—yikes!
- Employees can snag discounts already, hinting at lower-than-expected demand.
- Major AI features are delayed, leaving potential buyers on the fence.
- In China, discounts are popping up on iPhone 16 models faster than you can say "Apple!"
Apple's latest and greatest iPhone lineup, iPhone 16, is here. But cracks are emerging: early signs suggest consumers aren't as enthusiastic as expected. Sales have fallen short of analyst projections, and discounts are already appearing just weeks after launch. This lukewarm demand caused Apple’s stock to tumble nearly 3%, pulling down the entire Nasdaq in the process, although it has largely bounced back since.
Here’s what’s going on and what you should know.
Key Takeaways:
- Apple iPhone 16 sales have dropped almost 13% compared to the iPhone 15’s first-weekend numbers.
- Ming-Chi Kuo, TF Securities analyst, highlights that Apple employees can already purchase the iPhone 16 at a discount—a sign of sluggish demand.
- The rollout of Apple Intelligence, the company’s much-anticipated AI feature, is delayed, likely contributing to the lackluster demand.
- In China, the iPhone 16 is already being sold at a discount, with significant price cuts spotted on popular local online retailers.
Photo via MacRumors // Analyst Ming-Chi Kuo raises concerns about early demand for the iPhone 16.
Apple's iPhone 16: A Lukewarm Reception
Despite the launch of the new iPhone 16, expectations surrounding Apple’s latest flagship device haven’t been met. Ming-Chi Kuo, a prominent analyst at TF Securities, noted that Apple employees can already purchase the iPhone 16 with an employee discount, something that traditionally takes weeks after a new release. "This could be another sign that early demand for the iPhone 16 is below expectations," Kuo posted on X (formerly Twitter).
In its first weekend on sale, Apple sold approximately 37 million iPhone 16 units, marking a 12.7% decline compared to last year’s iPhone 15 launch. Kuo pointed to the delayed release of Apple Intelligence as one of the main reasons for this dip in demand. These AI-powered features, which were supposed to be a major selling point for the iPhone 16, are not yet available, leaving many consumers hesitant to upgrade.
For some additional context: Let's do some math. A 12.7% drop, to 37 million units sold, would equate to 4.7 million less iPhones when compared to the iPhone 15 series' estimated first weekend sales numbers. Even if we gave Apple the benefit of the doubt here, and estimated that the average iPhone sells for $899 U.S. dollars... That would still equal roughly $4.2 billion dollars. And that's being generous.
It's actually extremely concerning that Apple can sell 37 million iPhones and people start freaking the hell out. I know it's down by about 12% but 37 million iPhones is still a lot of iPhones.— Some humorous commentary Apple Scoop found on X, formerly Twitter
With Google's upcoming antitrust trial looming, Apple potentially stands to lose their lucrative $20 billion dollar deal with the search giant. While it would be a win for consumers around the world, such a loss would hypothetically wipe out 4-6% of Apple's total profits. The stakes are high—and as every Apple user knows, Apple does not like losing money.
A Delayed AI Super Cycle
Apple had been counting on the release of Apple Intelligence, a suite of AI-driven tools integrated into iOS 18, iPadOS 18, and macOS Sequoia, to trigger what many industry insiders had dubbed an "upgrade super cycle." This new AI functionality is designed to enhance apps like Safari, Notes, Calculator, and Siri. However, it will only be available on select iPhone 15 models, as well as all iPhone 16 models. While some small intelligence features are expected with iOS 18.1, due some time in October, the most advanced features won't be here until some time around March 2025, Apple Scoop predicts. That's 6 months away.
One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch.— Ming-Chi Kuo
Analysts had hoped these features would push more users to upgrade immediately, but the staggered rollout appears to have stunted demand.
Photo via Apple Inc. // Discounts on the iPhone 16 are already appearing across major online retailers in China.
Sluggish Sales in China
In the crucial Chinese market, where Apple faces stiff competition from local smartphone brands, the company has struggled in recent years. Online retailers such as Pinduoduo (basically China's version of Temu) and Alibaba’s Tmall are already offering discounts on the iPhone 16.
For example:
- The iPhone 16 Plus (512GB) is being sold for 8,999 yuan (US $1,268)—a 10% reduction from its original price of 9,999 yuan.
- Discounts of around 4% are also available on the iPhone 16 Pro Max (256GB), which has dropped from 9,599 yuan.
While these price cuts may attract some buyers, they’re an indication of lower-than-expected demand. China, a key swing market for Apple, has shown a tepid reception to the new device. According to Counterpoint Research, Apple’s market share in China could shrink further as competitors continue to regain ground.
Photo via 9to5Mac // Pictured: iPhone 12. Once a darling in the Chinese market, Apple’s reputation has waned in recent years amid escalating trade tensions between the U.S. and China.
AI Delays Cause Concern
Apple’s stock has also felt the sting of these challenges, falling nearly 3% in recent trading sessions. Many analysts attribute this drop to the delayed AI features, mentioned earlier. Early shipping times for the new models have also been shorter than last year’s iPhone 15 Pro models, with delivery times averaging 14 days, compared to 24 days for the iPhone 15 Pro.
Pre-orders don't show meaningful growth, but we’re not concerned. The AI features will roll out gradually over the next 12 to 18 months, meaning the upgrade cycle could still materialize later.— Gil Luria, an analyst at D.A. Davidson.
Early Verdict: A Misstep or Just Delayed Success?
While the iPhone 16 has hit some early turbulence, industry experts remain divided on whether this signals a broader issue or just a delayed success story. Apple's bet on AI integration is a long-term play, but with the rollout delayed, many early adopters have held off upgrading.
Moreover, the current market conditions—ranging from competition in China to global economic factors—are further complicating Apple’s path forward. Due to inflation and other factors, many consumers just have less money in their pockets to spend. Even major restaurant brands like McDonald's are reportedly feeling the pinch of tighter consumer spending.
The next few months will be crucial in determining if the iPhone 16 will rebound, or if the company’s reliance on AI will need further refinement before it wins over the masses.
What’s Next?
As the delayed rollout of Apple Intelligence looms, Apple’s true test will come in the form of consumer response once these new features finally hit devices. For now, both analysts and consumers are left to wonder: Has the iPhone 16 flopped, or is Apple simply waiting for the next big wave?
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Thank you for visiting Apple Scoop! As a dedicated independent news organization, we strive to deliver the latest updates and in-depth journalism on everything Apple. Have insights or thoughts to share? Drop a comment below—our team actively engages with and responds to our community. Return to the home page.18th September, 2024 at 6:17 pm by Flynn
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