The drop in initial sales of the iPhone 16, especially of the Pro models, is causing concern among investors, negatively affecting Apple’s stock performance on Monday.
The Apple shares fall almost 4% after a company analyst reported that iPhone 16 sales during the first weekend fell 12.7% compared to what was seen for the iPhone 15 series a year earlier.
It turns out that the new iPhones will feature the ability to run Apple Intelligence, the company’s artificial intelligence software offering. However, the company is staggering the rollout of those features, so customers won’t be able to take advantage of them right away. That’s one factor affecting early demand for the iPhone 16 Pro family. Another is that “intense competition in the Chinese market continues to impact iPhone demand.
The Pro models are Apple’s most expensive offerings. The iPhone 16 Pro starts at $999while the iPhone 16 Pro Max starts at $1,199. While the cheaper base models saw an improvement in year-over-year sales during their first weekend of availability, “their impact on total iPhone shipments is limited,” Kuo wrote.
Apple: Other iPhone 16 Reviews
BofA analyst Wamsi Mohan, however, mentioned that Apple likely produced more iPhone 16 Pro models this year, which could explain why wait times aren’t as long as last year. “Any differences, at this stage, could be due to factors such as supply, inventory, allocation, and pricing versus final demand,” he wrote.
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Reuters
Mohan specifically noted that “shorter” shipping times in China compared to other markets could be due to “better supply versus lower demand.”
Citi analyst, Atik Malikwrote that investors are particularly focused on the impact of Apple Intelligence’s phased rollout on demand, especially in the Chinese market.
Another key question for investors is potential pressure on margins. Malik mentioned another big question he hears in his conversations with investors: “Will the new iPhones have lower margins given that there hasn’t been an increase in average selling prices and the differentiation between Pro and non-Pro models is not as large?
Apple shares fall after news of pre-orders
In a note to clients, JPMorgan analyst, Samik Chatterjeesaid iPhone 16 Pro preorders were “moderately slower compared to last year.” Meanwhile, orders for the standard iPhone 16 model were in line with last year’s iPhone 15 launch, it said.
Chatterjee rates Apple shares overweight or buy, with a price target of $265.
Source: Ambito
