Jefferies Expresses Caution on iPhone 16 Demand in China

Jefferies Expresses Caution on Demand for iPhone 16 in China

Jefferies analysts have issued a cautionary note regarding the demand for Apple Inc's (NASDAQ: AAPL) new iPhone 16 models in China. They observed that the presence of the new iPhones on third-party platforms may reveal insights into the actual market demand.

Despite the new iPhone 16 and 16 Pro appearing as 'sold out' on Apple's official website in China, availability on other retail platforms such as Tmall and PDD suggests a contrasting narrative. Stocks of the latest models are readily accessible on these platforms, which could indicate that consumer demand is not as robust as Apple might hope.

Additionally, Jefferies highlighted that the delivery times for the iPhone 16 Pro models remained unchanged on the Apple website since pre-orders began. In fact, Tmall has reported a decrease in delivery times, with PDD still offering both Pro models for delivery before the end of September.

Pre-order Trends Indicate Mixed Demand

The brokerage conducted a follow-up analysis on pre-order delivery times for the iPhone 16 across six major markets, including Hong Kong and the U.S. The initial checks conducted shortly after the launch indicated a slow response from consumers during the first two days of availability, raising concerns about the overall demand.

International iPhone Pro Demand Shows Improvement

Interestingly, Jefferies found that outside of China, demand for the iPhone 16 Pro models is showing signs of improvement. There are now noticeable wait times for the 16 Pro, which is a shift from earlier reports that suggested availability within a quick two to three weeks.

Similar demand trends have been observed in markets like the United Kingdom and Germany. In contrast, wait times in Japan have remained consistent, indicating a stable interest in the iPhone 16 models.

In the United States, the average delivery lead time for the iPhone 16 Pro Max has held steady at three to four weeks, a marked improvement compared to the same period last year, where delays stretched to five to six weeks.

The Role of Artificial Intelligence in the New iPhones

The iPhone 16 series also marks Apple's initial step into integrating generative artificial intelligence into their flagship devices. Despite the potential of these technologies, Apple has indicated that the release of AI features will be gradual throughout the coming months.

The tech giant is counting on these artificial intelligence capabilities to drive sales growth in a market that has experienced a slowdown over the past year, particularly in China, where competition has intensified among smartphone brands.

Conclusion and Outlook

As Jefferies continues to monitor market trends, it remains cautious about the traction the iPhone 16 is gaining in China. The resale of models on third-party platforms suggests that while there may be excitement among consumers, it may not translate into immediate high sales. Observing how the competing brands react and how Apple deploys its new AI features will be critical as the company strives to reclaim its market position.

Frequently Asked Questions

What did Jefferies say about the demand for iPhone 16 in China?

Jefferies expressed caution regarding the demand for the iPhone 16 in China, highlighting the availability of the models on third-party platforms as a sign of potential weakness in consumer interest.

How is iPhone 16 sales performing outside of China?

Demand for the iPhone 16 Pro models appears to be improving outside of China, with observable wait times for delivery compared to earlier availability.

What could affect the sales of iPhone 16 models?

Heightened competition in the smartphone market, particularly in China, as well as the gradual roll-out of generative AI features, could significantly impact iPhone 16 sales.

Are there differences in delivery times between different markets?

Yes, delivery times vary by market. For instance, the average delivery lead time in the U.S. for the iPhone 16 Pro Max is currently three to four weeks, which is better than last year.

What new features does the iPhone 16 incorporate?

The iPhone 16 series marks Apple's first attempt to incorporate generative artificial intelligence into its devices, which is aimed at stimulating sales growth.

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