In an investor note shared by 9to5Mac, Barclays analysts reveal that Apple has recently reduced iPhone 16 production by three million units. According to supply chain checks, these cuts were made at a key semiconductor partner for iPhone orders.
iPhone 16 production cut is linked to lower-than-expected demand
Barclays analysts suggest that iPhone 16 shipments are expected to decline by 15% year-over-year. Despite this, the performance for the previous quarter aligns with expectations. The report mentions that the September quarter will see 51 million iPhone 16 units shipped, benefitting from two extra days of sell-through compared to the iPhone 15 models.
Looking ahead, the December quarter presents more challenges. The production cut, coupled with reduced demand, puts iPhone 16 shipments at greater risk.
Analysts believe this slowdown may be tied to Apple’s rollout of Apple Intelligence, the company’s new AI features, which have yet to fully launch. This delayed Apple Intelligence rollout is also expected to contribute to the softer demand. This is notable because the new models (especially the Pro models) have barely anything different in appearance, aside from the new Capture button of course.
The gradual release of Apple Intelligence appears to be a key factor in the reduced demand. The company launched iOS 18.1 Beta with Apple Intelligence for the iPhone 16 in mid-September, but the delay in delivering the full set of features could have contributed to a “softer” reception from consumers.
Barclays analysts noted, “We think Sep-Q iPhone units are on track for 51M as the best case (consensus and Barclays both at 51M for Sep-Q estimate), assuming some channel fill in line or better vs. last year due to more selling days. We believe July and August sell-through has been flattish Y/Y.”
Another challenge for Apple is that the full Apple Intelligence feature set may have limited availability outside of the U.S., potentially impacting global shipments. In addition, the lack of significant design innovation could also be influencing weaker demand. While the iPhone 16 and iPhone 16 Plus received a new camera layout, the iPhone 16 Pro and Pro Max models look very similar to their predecessors.
(Via)
Comments