Apple iPhone 16 Pre-Orders Indicate Potential Demand Shift and AI Integration

Apple iPhone 16 Pre-Orders Show Possible Low Demand, One Sign Could Point To Company Breaking This Employee Rule - Apple (NASDAQ:AAPL)

An analyst predicts weak demand based on data and a new key point. A well-known Apple Inc AAPL analyst and iPhone sales forecaster is predicting weak demand of the iPhone 16 with a new hint that expectations may not be met. What Happened: Apple unveiled the iPhone 16 last week and highlighted several new features including its Apple Intelligence generative AI that will be rolled out to consumers. Early pre-order data shows demand for the iPhone 16 may be lower than expected due to a lack of reasons for existing iPhone owners to upgrade to the latest model. Apple analyst Ming-Chi Kuo recently said pre-order sales for the iPhone 16 have reached 37 million units. On Wednesday, Kuo shared another sign that demand could be low. "Apple employees can already purchase the iPhone 16 with their employee discount. Typically, employees have had to wait several weeks after the release of new iPhone models before being able to buy. This could be another sign that the early demand for the iPhone 16 is below expectations," Kuo tweeted. Kuo's recent 37 million estimate comes from pre-order data from Apple and supply chain surveys. Average delivery times and shipment volumes could indicate weaker demand for the more expensive iPhone Pro models, Kuo also said. Did You Know? Congress Is Making Huge Investments. Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool Why It's Important: Smartphone competition in global markets such as China could be hurting demand for the iPhone 16 along with weak reception to the Glowtime event and the new features. With many consumers expecting more integrated AI features, the lack of AI features and slow rollout of Apple Intelligence could be a disappointment. While it remains to be determined what the official sales figures for the iPhone 16 in 2024 and beyond are, initial iPhone 16 leaks aren't suggesting strong results. Analysts could lower price targets and financial expectations as more data becomes available. Pre-orders for the iPhone 16 began on Sept. 13 with initial deliveries on Sept. 20. AAPL Price Action: Apple stock closed Wednesday up 1.80% at $220.69 versus a 52-week trading range of $164.08 to $237.23. Apple stock is up 18.9% year-to-date in 2024. Read Next: Apple Analysts Mixed After Glowtime Event: iPhone 16 Could 'Drive Upgrades,' But 'Next Year Will Be Better' Photo: Courtesy Apple Market News and Data brought to you by Benzinga APIs

Apple iPhone 16 demand is so weak employees can already buy it on discount

OpenAI's Safety and Security Committee is going independent and they have some suggestions "Apple employees can already purchase the iPhone 16 with their employee discount," TF Securities analyst Ming-Chi Kuo said in a post on X Wednesday. "Typically, employees have had to wait several weeks after the release of new iPhone models before being able to buy. This could be another sign that the early demand for the iPhone 16 is below expectations." In the first weekend since its debut, Apple sold about 37 million iPhone 16 smartphones -- down nearly 13% from iPhone 15 first-weekend sales a year ago, Kuo said in a blog post Monday. Kuo attributed the slower first-weekend sales to lower-than-expected demand for the iPhone 16 Pro lineup, largely because of the staggered released of Apple Intelligence. "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 alongside the iPhone 16 release," Kuo said. An analysis of pre-orders by Jefferies (JEF) released Wednesday found that demand for the new iPhone lineup is slowly beginning to improve in the U.S., with delivery times for the iPhone 16 Pro reaching two to three weeks in seven major cities analyzed by the investment bank. But this is still below last year's levels. The slate of new AI features includes capabilities within Safari, Notes, Calculator, and, most notably, Siri for the iOS 18, iPadOS 18, and macOS Sequoia. But at its annual event last week, Apple confirmed that early Apple Intelligence tools, which will only be available on iPhone 15 Pro models or higher, will launch as a software update in beta in October, with more features rolling out in the following months. Apple -- and analysts -- were betting that these new, long-awaited features would drive an upgrade "super cycle," and mark a new era of growth for the tech giant. But recent research into the motivators behind upgrades found that a just 18% of consumers buy a new iPhone because of new features. A majority only opt to upgrade their smartphones once they become obsolete, or are stolen or damaged. Much of this shortfall has come from China, where Apple is facing what Kuo called "intense competition," particularly from Huawei and other homegrown rival smartphone makers.