iPhone 16 Sales Fall Flat: Is Apple Losing Its Magic?
- The iPhone 16 launch didn’t quite explode like Apple hoped—what's going on?
- AI was supposed to be the game changer, but early sales are saying something else.
- There’s more to this slow start than meets the eye—find out why Apple’s next big thing might still pull through.
Apple's launch of the iPhone 16 has been met with mixed reactions. While the tech giant aimed to leverage its artificial intelligence (AI) capabilities to jumpstart sales, initial estimates suggest that consumer interest is not as high as anticipated.
Underwhelming Early Sales
Pre-sale figures indicate a lackluster start. Analysts like Ming-Chi Kuo of TF International Securities estimate that Apple sold around 37 million units during the first weekend of pre-sales—a 12% decline compared to the iPhone 15 launch. Fellow analysts, such as Wedbush’s Dan Ives, offered a more optimistic estimate of 40 million units, but even these numbers fall short of Apple's high expectations.
More troubling for the Cupertino company, sales of its higher-end models—like the iPhone 16 Pro and iPhone 16 Pro Max—are down significantly. According to Kuo, these models saw year-over-year declines of 27% and 16%, respectively. By contrast, sales of the standard iPhone 16 and iPhone 16 Plus saw a modest uptick compared to their predecessors.
Photo via Apple Inc. // Despite a sleek design and powerful hardware, early demand for the iPhone 16 hasn't lived up to expectations.
"The Base Models Are Just Too Good"
The iPhone 16 series boasts upgraded cameras and processors, even in its more affordable models, which could be steering customers away from the pricier Pro models. “Given that this is largely a software upgrade cycle, my concern is that there were a greater mix of sales in the lower-priced iPhone 16 than the higher-priced devices,” says Angelo Zino, technology analyst at CFRA Research.
Zino further commented that the strong upgrades in the iPhone 16's camera and processing power make it difficult for consumers to justify the extra cost of the Pro models. "When you look at the standard devices, they got a really great upgrade."
AI Features Not Enough?
One major selling point for the iPhone 16 was the integration of AI, branded as "Apple Intelligence." Yet, the full suite of AI features isn’t expected to roll out completely until early 2025. This delay may have tempered enthusiasm for the new models. Lead times for the iPhone 16 Pro, for instance, are down to 1-2 weeks, compared to the 3-4 week wait times for last year's Pro models, indicating lower-than-expected demand.
Kuo noted that competition in key markets like China also remains a significant hurdle for Apple.
Photo via Apple Inc. // Apple fans are still waiting for the much-anticipated AI features to be fully available on iPhone 16.
Supply Chain Improvements May Be a Silver Lining
While shorter lead times could signal weak demand, some analysts point to Apple’s improved supply chain as a factor. Lex Chiew from Canalys believes Apple has fine-tuned its logistics, allowing for quicker production and delivery. CFRA’s Zino adds that Apple likely increased supply ahead of the iPhone 16 launch, anticipating a large upgrade cycle.
Still, many industry experts remain cautiously optimistic about the iPhone 16's potential as we approach the crucial holiday season. As Wedbush analyst Dan Ives said, “It’s all about a monster holiday quarter and the supercycle begins for iPhone 16 in our view.”
T-Mobile Sees Positive Trends
Despite the somewhat sluggish pre-sale numbers, there are encouraging signs. T-Mobile CEO Mike Sievert told CNBC that the carrier sold more iPhone 16 models in the first week of pre-sales compared to the iPhone 15 launch, hinting at strong carrier-specific performance.
The Bigger Picture: A Slow Start, But Strong Holiday Potential
As Apple gears up for its earnings report next month, the tech world will be watching closely. The data will only include seven days of pre-sales and ten days of regular sales, but this limited snapshot could still offer valuable insights. And with the holiday season fast approaching, many analysts remain hopeful that the iPhone 16 series will find its stride.
However, if the iPhone 16 is to truly shine, Apple needs to demonstrate why its new AI features are a game changer. As Zino put it, "You need to wait for word of mouth to trickle through the consumer base over the next couple of quarters." Only time will tell whether the iPhone 16 can live up to its potential.
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