Apple shares slip as shorter iPhone 16 shipping times signal soft demand

FE Team | Published: September 17, 2024 22:27:44

Shares of Apple fell nearly 3 per cent on Monday after some analysts said 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, reports Reuters.
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 with last year's 15 Pro models, as of Monday, three days after Apple started taking pre-orders.
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 image represents a grouped bar chart with data on expected lead times for Apple's latest iPhone 16 lineup. Analysts estimate delivery times for the iPhone 16 to be shorter than the iPhone 15, potentially indicating weaker-than expected demand.
The image represents a grouped bar chart with data on expected lead times for Apple's latest iPhone 16 lineup. Analysts estimate delivery times for the iPhone 16 to be shorter than the iPhone 15, potentially indicating weaker-than expected demand.
"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," Ming-Chi Kuo, a Taiwan-based analyst at TF International Securities, said in a blog post.
Apple Intelligence is set to arrive in the US version of the English language in beta 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 per cent and 16 per cent, respectively, according to Kuo.
The image represents a column chart with first week pre-order sales estimates for Apple's iPhone 16 lineup compared to the earlier iPhone 15 series. Pre-order sales for the 16 Pro models have fallen, analysts say.
The image represents a column chart with first week pre-order sales estimates for Apple's iPhone 16 lineup compared to the earlier iPhone 15 series. Pre-order sales for the 16 Pro models have fallen, analysts say.
"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."