iPhone 16 Sales Not Meeting Expectations, According to DigiTimes
iPhone 16 Launch: A Mixed Bag
The launch of Apple's iPhone 16 has been met with mixed reactions. On one side, Daniel Ives from Wedbush Securities has informed clients that this is the commencement of an AI-driven iPhone supercycle. However, numerous reports suggest a different story.
Reports from DIGITIMES Asia
The latest report comes from DIGITIMES Asia, a supply chain news website. It refers to industry insiders who have spoken to the South Korean media website DealSite. They suggest that the initial sales of the iPhone 16 have not met expectations.
Initial Sales Lower Than Expected
According to DIGITIMES Asia, the iPhone 16 has experienced lower-than-expected initial sales. This has raised concerns for South Korean display manufacturers, with LG Display (LGD) facing significant challenges. Industry sources have reported to South Korean media DealSite that the iPhone 16 series' initial sales performance has not met expectations. This is likely to affect the performance of South Korean OLED panel suppliers in the second half of 2024.
iPhone 16 vs iPhone 15
The iPhone 16 was launched on September 20, in key markets such as South Korea, the US, and China. Even though the pre-order stock of South Korea's three major telecom providers sold out, a closer examination reveals that the demand for the iPhone 16 is significantly different from the iPhone 15.
Inventory Shortages and Decreased Pre-orders
Analysis from South Korean media suggests that the initial supply of iPhone 16 sold out in South Korea due to a lower supply in 2024 compared to 2023. This has led to inventory shortages, a situation mirrored in the US and China. Industry sources have indicated that global pre-orders for the iPhone 16 have decreased by approximately 13% compared to the iPhone 15.
Discounts Due to Low Demand
A report from the South China Morning Post last week revealed that Chinese online retailers are offering discounts for the new iPhone due to low demand. These discounts in China appeared just a few days after an analysis of US pre-orders by TF International Securities analyst Kuo Ming-chi found less demand for the more expensive iPhone 16s compared to base models.
Wedbush's Ives on the AI-driven iPhone Supercycle
Despite these reports, Wedbush's Ives informed clients about an AI-driven iPhone supercycle that he believes will enable Apple to break its historical mark for iPhone units in a year. This, he suggests, could translate into a $4 trillion market cap for Apple in 2025. The crucial question, however, is whether consumers are willing to pay the equivalent of a monthly car payment to acquire the new iPhone with Apple Intelligence.
Bottom Line
The launch of the iPhone 16 has been met with mixed reactions and it seems the initial sales have not met expectations. This raises questions about the future of the iPhone and whether consumers are willing to pay a premium for the latest model. What are your thoughts on these developments? Share this with your friends and let us know your views. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
