iPhone 16 Sales Fall Short of Apple’s Expectations

Apple had high hopes that new artificial intelligence enhancements would boost the popularity of the iPhone 16. However, early pre-sale figures suggest a less enthusiastic consumer response than anticipated.

The tech giant has been relying on the iPhone 16 to rejuvenate its sales following a period of lackluster performance. The era when Apple enthusiasts would eagerly upgrade their phones nearly every year seems to have passed, especially since no significant reasons to upgrade have been provided since the introduction of 5G with the iPhone 12. Apple’s strategy included integrating a range of new AI-driven software features, aiming to reignite consumer interest.

Despite vigorous promotional efforts, it remains uncertain whether Apple has convinced its customer base of the new model’s benefits. According to analyst Ming-Chi Kuo of TF International Securities, the first weekend of iPhone 16 pre-sales saw about 37 million units sold, a decrease of more than 12% compared to the previous year. Demand for the pricier iPhone 16 Pro models notably declined compared to their predecessors during their launch.

Wedbush analyst Dan Ives estimated pre-sales slightly higher at around 40 million units, while Angelo Zino from CFRA Research indicated a year-over-year decline in pre-order sales. Analysts have observed a stronger preference for the lower-priced iPhone 16 and iPhone 16 Plus models over the Pro versions, potentially impacting the average selling price and overall sales revenue.

Kuo noted that 9.8 million iPhone 16 Pros and 17.1 million iPhone 16 Pro Max devices were sold in the initial pre-sale weekend, marking decreases of 27% and 16% respectively from the previous year. In contrast, sales for the standard iPhone 16 models showed a slight increase.

Zino expressed concerns that the base models’ enhancements, particularly in cameras and internal processors, were so substantial that they diminished the appeal of the higher-priced models. He also pointed out shorter delivery lead times for the iPhone 16 Pro models compared to last year and mentioned that Apple’s new AI features, dubbed “Apple Intelligence,” have not yet been released and are expected to start rolling out in the next software update.

Despite these challenges, it is still early days for the iPhone 16, which became available in stores on September 20. Analysts like Chiew from Canalys suggest that shorter lead times might indicate improved supply chain efficiency rather than decreased demand.

Moreover, T-Mobile CEO Mike Sievert reported that the carrier sold more iPhone 16 units in its first week than the previous model. Apple is yet to disclose official sales figures, which will include a week of pre-sales and ten days of regular sales in their next earnings report.

Despite a potentially slow start, analysts like Ives remain optimistic about the iPhone 16’s prospects, particularly with the upcoming holiday season, which could mark the beginning of a new sales supercycle for Apple.