Apple Cuts iPhone 16 Orders Amid AI Integration and Market Challenges

Apple analyst Kuo says company cut iPhone 16 orders by 10 million units

"As a result, iPhone 16 production for 2H24 is now estimated at 84 million units," Kuo wrote, noting that his estimate is down from about 88 million units. Kuo now forecasts Apple partners will produce 80 million iPhones during the fourth quarter, down from around 84 million last year. He estimates production of 45 million units during the first quarter of 2025 and 39 million units during the second quarter, down from 48 million and 41 million, respectively. "iPhone revenues are expected to come under pressure in 1H25 due to a YoY shipment decline and a less favorable product mix due to the launch of SE4," Kuo said, referring to the iPhone SE 4 phone he expects Apple to ship in December. Apple's iPhone SE models are usually the most affordable in its lineup but it doesn't refresh them annually. "I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service," Kuo said. "However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development." Apple Intelligence is expected to launch in an iOS 18.1 update sometime next week, as a beta feature for new users to try. It's supported by the latest iPhone 16 phones and last year's iPhone 15 models. The first features will let users summarize text messages and emails, choose automatic replies for text messages and more. Apple didn't immediately respond to a request for comment.

Apple down as top analyst Kuo says company cut iPhone 16 orders by 10M units By Investing.com

Investing.com -- Apple fell Wednesday after Market analyst Ming-Chi Kuo at TF International, known for his knack of nailing predictions on Apple, delivered a gloomy update on iPhone 16 demand, saying the tech giant has cut a total of 10 million orders for the fourth quarter of 2024 through the first half of 2025. The cuts were mostly to non-pro iPhone 16 models, with total iPhone production for 4Q24, 1Q25, and 2Q25 now forecast at around 80 million, 45 million, and 39 million units, respectively, all down from a year earlier, Kuo wrote in a post on Medium. The cut to orders over the three quarter period through H1 2025, indicates iPhone 16 production for second half of fiscal 2024 is now estimated at 84 million units, down from 88 million previously. The gloomy estimate on iPhone 16 orders suggest there is "no evidence yet that Apple Intelligence could boost iPhone shipments in the near term," Kuo added. Apple unveiled its iPhone 16 at its 'glowtime' product event last month, and showcased the integration of its artificial intelligence assistant Apple Intelligence into its new suite of iPhones. Ahead of the launch, many Wall Street were optimistic that the new AI-powered iPhones could sway users of older iPhone models to upgrade, leading to a new upgrade cycle for the tech giant. Apple released Wednesday a new preview of its Apple Intelligence features including the including integration of ChatGPT. Apple Intelligence will be available to the public as part of the official iOS 18.1 release next week, Apple said.

Kuo again predicts doom & order cuts for new iPhone

In a sketchy new report, analyst Ming-Chi Kuo concludes that Apple Intelligence is a failure because Apple may have cut iPhone 16 orders before release. Or something like that. Reporting Apple's iPhone orders is a dodgy business at the best of times -- even Ming-Chi Kuo has said some claims are weird. Apple switches suppliers, for one thing, and with a finite production capacity -- incredibly large, but still finite -- it also changes the mix of devices being made to match demand. That last is perhaps what Kuo is reporting now. Writing on his blog, he says that "iPhone 16 orders were cut by around 10M units for 4Q24 -- 1H25, with most of the cuts affecting non-Pro models." Kuo says his figures are based on his own supply chain survey. He's now saying the industry will make 84 million iPhones in the second half of 2024, down from 88 million. The rest of that overall 10 million drop is from 4Q24 dropping from 84 million to 80, 1Q25 down from 48 million to 45 million. And for 2Q24 dropping from 41 million to 39 million. It all probably works out to a 10 million drop, anyway. Something like that. What's more significant, says Kuo, is that this means Apple Intelligence is not going to be the big boost that Apple expected. At least, not at first. "Apple's recent order cuts suggest this optimistic expectation may not materialize in the short term," writes Kuo. "I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service." "However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development," he concludes. Having painted a picture of the iPhone being under stress because of the yet-to-launch Apple Intelligence failing to improve sales, Kuo then goes the opposite way and says Apple will be fine. "Apple's iPhone revenue in 4Q24 may not fully reflect the impact of production cuts," he writes, "as the gap between production and sell-through in 4Q23 was larger than in 4Q24, and the product mix in 4Q24 is more favorable (with increased production of the Pro Max model for Sep-Oct)." That favorable product mix won't last, though, as Kuo sees Apple's revenues taking a hit because of the success he predicts for the expected iPhone SE 4 in early 2025. The iPhone SE 4 is expected to support Apple Intelligence. In recent years Ming-Chi Kuo's reports have varied between supply chain information, and extrapolation of Apple's plans. For once he has clearly said that his latest report is based on an industry survey, but at the same time he has a poorer track record for predicting Apple's plans. Regardless, the tale will be partially told on October 31, when Cook and company announce earnings.

Apple stock slips after a big cut for iPhone 16 orders

Prada is making spacesuits for NASA and the price tag is out of this world Apple analyst Ming-Chi Kuo said the tech giant cut iPhone 16 orders by around 10 million units for the fourth quarter of this year into the first half of 2025. Most of the cuts were for non-Pro models, Kuo said, but an estimate for iPhone 16 production is now down to 84 million units for the second half of the year, compared to the previous estimate of 88 million. Total iPhone production estimates for the fourth quarter and the first and second half of next year are all down year-over-year, Kuo said, to 80 million, 45 million, and 39 million units, respectively. Previous estimates were 84 million, 48 million, and 41 million, respectively. iPhone revenue for Apple's fourth quarter "may not fully reflect the impact of production cuts, as the gap between production and sell-through in 4Q23 was larger than in 4Q24, and the product mix in 4Q24 is more favorable (with increased production of the Pro Max model for Sep-Oct)," Kuo said. But iPhone revenues will likely "come under pressure" in the first half of next year, Kuo said, because of the year-over-year decline in shipments, and "less favorable product mix" after Apple launches the iPhone SE4. Mass production of the iPhone SE4 will start in December, Kuo said, and production is expected to be 8.6 million units between then and the first half of next year. Apple also released a new preview of its highly anticipated AI features and ChatGPT integration in the developer beta on Wednesday. Its Apple Intelligence features are expected to be released next week through the iOS 18.2, iPadOS 18.2 and macOS Sequoia 15.2 software updates.