Apple’s latest iPhone 16 model has faced slower sales than anticipated, sparking concerns among analysts. During the first weekend of pre-orders, Apple sold just 37 million units, a significant drop of over 12% compared to the same period last year. According to a report from Apple analyst Ming-Chi Kuo, shared by CNN, the high-end iPhone 16 Pro models saw a steep decline in demand compared to last year’s iPhone 15 launch.
Decreased demand for premium models
The iPhone 16 Pro and iPhone 16 Pro Max, Apple’s flagship devices, experienced notable sales drops. Kuo reported that during the initial weekend, Apple sold 9.8 million iPhone 16 Pro devices and 17.1 million Pro Max units, marking declines of 27% and 16%, respectively, year-on-year. Interestingly, the standard iPhone 16 and iPhone 16 Plus models saw a slight increase in sales, contrasting with the weaker performance of the premium models.
Are older iPhones too good?
According to Angelo Zino, a tech analyst at CFRA Research, one key issue might be that Apple’s older iPhone models remain highly competitive. “This is primarily a software upgrade cycle, and I believe the lower-priced iPhone 16 models are performing better in sales compared to the premium models,” Zino explained. He also noted that the standard models received significant camera and internal processor upgrades, making them an attractive option for buyers not looking to splurge on higher-end devices.
Shorter delivery times raise concerns
Kuo also pointed out shorter delivery times for the iPhone 16 Pro compared to its predecessor. Customers pre-ordering the Pro model faced a wait time of just 1-2 weeks, whereas last year’s iPhone 15 had a 3-4 week delay. This may indicate weaker demand, particularly for the more expensive versions. Additionally, Kuo highlighted Apple’s challenges in the Chinese market and the fact that the company’s AI-driven features, branded as “Apple Intelligence,” are not yet available on the iPhone 16 models. These features are expected to roll out in beta with the iOS 18.1 update next month.
Conclusion: Has Apple’s strategy hit a roadblock?
While Apple remains one of the most influential tech companies in the world, the slower sales of the iPhone 16 suggest that their strategy might need reevaluation. Customers appear to be leaning towards the standard models due to their affordability and significant upgrades, while the premium models no longer stand out enough to justify their higher price. The delayed introduction of new AI features and rising competition in China further complicate the situation.
In the ever-evolving smartphone market, Apple might need to focus on delivering more groundbreaking innovations to recapture the interest of consumers, particularly in its premium product lines.
Fact-check information:
- Ming-Chi Kuo is an Apple analyst for TF International Securities, and his reports are widely followed by investors and tech enthusiasts.
- Angelo Zino is a senior equity analyst at CFRA Research, specializing in technology companies.
- Apple’s “Apple Intelligence” AI features are confirmed to launch with iOS 18.1, currently expected in beta form next month.
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