Apple shares slump as iPhone 16 seeing weak demand

Shares of Apple fell nearly 3% on Monday after several analysts said that delivery times for the new iPhone 16 Pro models indicated weaker-than-expected demand, possibly due to the delayed rollout of key artificial intelligence features.

Apple last week unveiled its long-awaited iPhone 16 series designed around its AI software, Apple Intelligence.

Early pre-order data from BofA Global Research revealed shorter global shipping times for the iPhone 16 Pro models compared to last year’s 15 Pro models, as of Monday, three days after the company started taking pre-orders .


Early pre-order data from BofA Global Research revealed shorter global shipping times for the iPhone 16 Pro models, above, compared to last year’s 15 Pro models. REUTERS

Ship time on average for the iPhone 16 Pro currently stood at 14 days, lower than 24 days for the iPhone 15 Pro last year, the data showed, while the 19-day ship time for the iPhone 16 Pro Max compares with 32 days last year.

“The key factor is the lower-than-expected demand for the iPhone 16 Pro series…the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release,” said Ming-Chi Kuo, an Apple analyst at TF International Securities, said in a blogpost.

Apple Intelligence is set to arrive in the US version of the English language in beta only next month, and for other versions as late as next year, potentially keeping some customers on the fence about upgrading to the 16 series.

First-weekend pre-order sales for the iPhone 16 Pro and Pro Max models were down 27% and 16%, respectively, according to Kuo’s estimates based on each model’s delivery time and production plans.


CEO Tim Cook
Apple Intelligence is set to arrive in the US version of the English language in beta only next month, and for other versions as late as next year, potentially keeping some customers on the fence about upgrading. CEO Tim Cook, above. AP

“The US is much weaker than last year, unless Apple massively increased supply allocation,” Jefferies analysts said.

To be sure, some analysts also said that improving supply of the Pro models could have led to shorter shipping times this time around, after supply issues with a camera lens affected shipments for the iPhone 15 Pro Max last year.

“We are not concerned if pre-orders don’t show meaningful growth,” D.A. Davidson analyst Gil Luria said.

“The (AI) features will be rolling out gradually … which means the upgrade cycle will likely materialize over the next 12-18 months.”

Shares closed at $216.32 but are still up 12% this year.

Source link

Leave a Comment