Apple is currently facing a dip in demand for its new iPhone 16 Pro models, leading to a nearly 3 percent drop in its stock price.
In 2023, Apple had generated revenue of $200.583 billion (down 2 percent or $4.9 billion) from the sale of iPhones alone. This compares with 7 percent increase in the revenue from iPhones in 2022. In 2023, Apple had achieved more revenue from sale of Pro iPhone models as compared with non-Pro iPhone models.
The slowdown in iPhone 16 Pro models has been linked to the delayed introduction of key artificial intelligence features that are expected to drive the phone’s appeal. The iPhone 16 series, heavily promoted around its AI software, known as Apple Intelligence, has not yet delivered these features at launch, causing consumers to hesitate in upgrading to the latest devices, Reuters news report said.
Analysts are pointing to shorter global shipping times for the iPhone 16 Pro models compared to last year’s iPhone 15 Pro as a sign of underwhelming demand. As of three days after the opening of pre-orders, shipping times for the iPhone 16 Pro averaged 14 days, significantly shorter than the 24-day average for the iPhone 15 Pro. Similarly, the iPhone 16 Pro Max has a current shipping time of 19 days, compared to 32 days for its predecessor.
Ming-Chi Kuo, an analyst from TF International Securities, emphasized that demand for the iPhone 16 Pro series has been impacted by the absence of Apple Intelligence at launch. This AI feature is only expected to roll out in beta for the U.S. in English next month, with broader international availability delayed until 2024. This delay may be contributing to the 27 percent and 16 percent decline in first-weekend pre-orders for the iPhone 16 Pro and Pro Max models, respectively.
While some analysts, including those from Jefferies, have suggested that improved supply chains could also explain the reduced shipping times, others remain cautious. D.A. Davidson’s analyst Gil Luria noted that the gradual release of AI features may stretch the iPhone upgrade cycle over the next 12-18 months, giving Apple more time to see demand materialize. Nevertheless, concerns linger that Apple’s delayed AI capabilities may keep some customers waiting for a more compelling reason to upgrade.
