Analysts Forecast Low Demand for Apple's Upcoming iPhone 16
Analysts Forecast Low Demand for Apple's Upcoming iPhone 16
Recent analysis indicates that demand for Apple's (NASDAQ: AAPL) iPhone 16 is not shaping up as hoped. Analysts from Barclays have reported that early indicators suggest a subdued consumer interest in the new model. This conclusion arises from noticing shorter lead times and feedback gathered from channel checks during the initial pre-order week.
Initial Availability and Response
According to analysts, the initial response to both the iPhone 16 Pro and the base models appears to be weaker compared to last year's iPhone 15 launch. This lack of enthusiasm is reflected in the significantly reduced wait times for the iPhone 16 Pro models across various regions, especially notable in the U.S.
U.S. Market Observations
In the United States, the lead time for the iPhone 16 Pro Max during its opening week was a mere 26 days. This marked a notable decrease from the previous year's lead time of 41 days for the iPhone 15 Pro Max. Similarly, the wait for the iPhone 16 Pro cut down to 18 days compared to 25 days last year, raising concerns about consumer demand.
Chinese Market Indicators
The situation looks even more telling in China, where demand trends are critical for Apple’s overall performance. There, the iPhone 16 Pro Max's wait time has plummeted to 18 days, a sharp drop from the 36 days required for the iPhone 15 Pro Max. These insights have experts worried about the strength of consumer interest in key markets.
Broader Demand Trends
Barclays sees these reduced lead times and diminished demand as alarming signals that indicate weaker-than-expected interest in the iPhone 16, particularly in pivotal markets such as the U.S. and China, where consumer spending has been reported to be more conservative lately.
Additional analysis suggests that global pre-order units may experience a year-over-year decline in the mid-teens percentage according to supply chain sources, which adds to the overall concern about this launch's success.
Impact of Apple Intelligence Delay
One significant aspect that may affect enthusiasm for the iPhone 16 is the delayed rollout of a key feature known as Apple Intelligence. This feature is not expected to launch until 2025 in certain markets, including China and parts of Europe. Barclays believes this delay could potentially dampen excitement surrounding the iPhone 16's capabilities.
Future Considerations for Apple
Although the earlier launch of the iPhone 16 gives Apple a slight edge with two extra days of sales in the September quarter, analysts expect that this will not be enough to counterbalance the trends of weakened demand. With these pressures in mind, Barclays continues to hold its Underweight rating with a price target of $186 for Apple's stock.
This suggests a cautious outlook for iPhone 16 sales unless there is a notable improvement in sell-through rates in the upcoming months.
Frequently Asked Questions
What are Barclays analysts saying about the iPhone 16 demand?
Barclays analysts express concerns about muted demand for the iPhone 16 based on shorter lead times and disappointing pre-order activity.
How do the iPhone 16 lead times compare to the iPhone 15?
The lead times for the iPhone 16 Pro and Pro Max are significantly shorter than those for the iPhone 15 models, indicating weaker initial interest.
What is the expected impact of Apple Intelligence's delay?
The delayed rollout of the Apple Intelligence feature is likely to affect consumer excitement and perception of the iPhone 16 negatively.
What is Barclays' price target for Apple?
Barclays maintains an Underweight rating on Apple with a price target of $186, suggesting cautious sentiment regarding future demand.
Why is the Chinese market critical for Apple's performance?
China serves as a crucial indicator of Apple's overall demand dynamics, and trends there can significantly impact the company's sales forecasts.
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