Apple’s latest iPhone 16 series appears to be falling short of the hype. While preorder numbers are still notable,they are reportedly lower than last year’s iPhone 15 lineup.
Last Monday, Apple revealed new versions of the iPhone, AirPods and Apple Watch at an event at its headquarters in Cupertino, California. Pre-orders for the new iPhones began Friday, with the official launch set for September 20.
Despite the initial rush, sales numbers indicate Apple is facing a tougher challenge compared to last year. Surprisingly, the larger Plus model seems to be the standout, while the Pro models, which usually dominate sales, struggled. Analysts attribute this to the global cost-of-living crisis, with a significant number of customers opting for Apple’s more affordable iPhone models this year.
Moreover, one of the “key factors” driver lower demand is that Apple Intelligence, the major selling point, isn’t available at launch with the iPhone 16 release. Apple Intelligence is expected to launch in beta for the U.S. version of English next month, with other versions possibly delayed until next year, leaving some potential buyers hesitant to upgrade.
Additionally, intense competition in the Chinese market continues to affect iPhone demand. Apple’s performance in China has dragged on its financial results this year, with first-quarter sales down 24% and projected to reach $60 billion for the full year. In 2023, revenue from China amounted to $72.6 billion, a significant portion of Apple’s $383.3 billion total sales. Meanwhile, competitors like Huawei are gaining ground, with the launch of its Mate XT, a triple-screen foldable smartphone, making a bold statement.
After reports surfaced that demand for the iPhone 16 might be slowing, Apple stock closed nearly 3% lower at the start of the trading week.
Barclays analysts have rated Apple as Underweight, with a price target of $186 per share, roughly 14% below its current closing price of $216.32. With this said, Apple is 8% away from its record high of just under $235 a share. However, this year’s annual product launch event failed to excite investors, as the unveiling of the iPhone 16 received a rather indifferent, lackluster response.
