iPhone 16 Sales Muted Initially, But Apple Intelligence Expected to Boost Demand
4 Sources
[1]
Upcoming AI features to fuel stronger iPhone 16 demand: BofA By Investing.com
Investing.com -- Apple's iPhone 16 Pro and Pro Max models exhibit extended shipping times, with the Pro at an average of 13 days and the Pro Max at 20 days globally, as of October 2, which is slightly less than previous years, Bank of America (NYSE:BAC) said in a Wednesday note. BofA suggests that
[2]
Early iPhone 16 Sales Are 'Muted' But That Is 'Likely Due To The Unavailability Of AI Capabilities,' Analysts Believe Apple Intelligence May Generate Sales Momentum
Apple was estimated to have recorded an unsatisfactory number of pre-orders this year for the iPhone 16 series, with the 'Pro' models reportedly garnering 12.7 percent fewer pre-sales compared to the iPhone 15 Pro and iPhone 15 Pro Max from 2023. Only the iPhone 16 Plus managed to offset the
[3]
Apple Intelligence will drive iPhone 16 sales but isn't a major factor yet
Investment bank JP Morgan analysts say that Apple Intelligence is not yet drawing iPhone users to upgrade, and demand for iPhone 16 Pro models is weaker than it was with the iPhone 15 Pro range. In April 2024, JP Morgan dropped its Apple stock price to $210 because it believed that Apple
[4]
Apple Analyst Signals 'Slower Start To The AI Cycle' As iPhone 16 Demand Softens - Apple (NASDAQ:AAPL)
Despite a slow start to the iPhone 16 Series, Chatterjee maintains a $265 price target, citing a robust AI upgrade cycle. As the curtain rises on the iPhone 16 Series, Apple enthusiasts are buzzing with anticipation. However, JPMorgan analyst Samik Chatterjee suggests that while the hype is
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Early iPhone 16 sales show slower momentum, particularly for Pro models. Analysts attribute this to the absence of AI features at launch but predict a surge in demand once Apple Intelligence becomes available.
Initial iPhone 16 Sales Show Muted Momentum
The launch of Apple's iPhone 16 series has seen a slower start compared to previous years, particularly for the Pro models. Bank of America reports that as of October 2, the iPhone 16 Pro and Pro Max models had extended shipping times of 13 and 20 days respectively, slightly less than in previous years
1
. JP Morgan analysts note "more muted momentum" in early orders for these high-end models3
.Absence of AI Features Impacts Initial Demand
Analysts attribute this subdued demand primarily to the unavailability of AI capabilities at launch. Apple Intelligence, the company's suite of generative AI features, is prominently marketed on iPhone 16 product pages but is not yet functional
2
. JP Morgan's survey reveals that Apple Intelligence currently ranks sixth among reasons for upgrading, behind factors such as 5G connectivity and overall phone speed3
.Expectations for Future Demand
Despite the slow start, analysts remain optimistic about the iPhone 16's long-term prospects. Bank of America maintains a Buy rating on Apple stock, citing expectations of a "multiyear iPhone upgrade cycle"
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. JP Morgan predicts that consumer appetite for Apple Intelligence models will grow as more countries are supported, given that it will initially be available only in US English3
.Sales Projections and Market Trends
JP Morgan has adjusted its near-term iPhone unit forecast, now estimating about 126 million iPhones sold in the second half of 2024, down from 130 million previously
4
. However, they maintain a bullish outlook on medium-term prospects, forecasting aggregate volumes for the iPhone 16 series over the next four quarters to surpass both the 15 and 14 series4
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Investor Outlook
Despite the initial slowdown, JP Morgan maintains its price target for Apple at $265 by December 2025
4
. Analyst Samik Chatterjee emphasizes the long-term potential, stating, "We see upside in several aspects of the business... transformation of the company to Services, growth in the installed base, technology leadership, and optionality around capital deployment"4
.Supply Chain Considerations
A recent fire at Tata's iPhone component plant in India caused a production halt for iPhone 15 and 14 models. However, Bank of America does not foresee any immediate impact on iPhone supply, noting that Apple's suppliers usually maintain adequate component inventories for assembly
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