Apple’s new iPhone 16 sales are struggling to generate sales in Australia, according to sources as consumers hold on to previous models, due in part to a lack of new features, including AI similar to what Samsung and Google devices have in their latest models, according to retail sources.
Globally demand for the new Apple iPhone is down with the US Company now slashing production numbers with manufacturers tipping a 15% decline “If note more” by the end of the year.
Unlike Samsung Apple has no foldable devices and limited AI with consumers telling retailers that they are happy with the camera and performance of their current model iPhone.
Recently Barclays analysts revealed that Apple has moved to reduce iPhone 16 production by three million units with more cuts expected if end of year sales fail to generate the growth that Apple was hoping for.
Ming-Chi Kuo, an Apple analyst with TF International Securities estimate that Apple sold an estimated 37 million units in the first weekend of iPhone 16 pre-sales, down more than 12% compared to the same period last year with sales falling further in recent days.
Barclays analysts suggest that iPhone 16 shipments are expected to decline by 15% year-over-year and that in the latest quarter Apple will ship 51 million iPhone 16 units with the Company hoping that the two extra days of sell-through will pull sales back up to the same levels as the iPhone 15.
Barclays claim that when looking ahead, the December quarter presents major challenges for Apple.
The production cuts, coupled with reduced demand, puts iPhone 16 shipments at greater risk of falling further behind as consumers who are struggling due to inflation issues and marketplace uncertainty pocket the savings instead of buying a new iPhone.
Analysts believe this slowdown may be tied to Apple’s rollout of Apple Intelligence, the company’s new AI features, which have yet to fully launch. This delayed Apple Intelligence rollout is also expected to contribute to the softer demand.
This is notable because the new models (especially the Pro models) have barely anything different in appearance, aside from the new Capture button.
The gradual release of Apple Intelligence appears to be a key factor in the reduced demand with Apple using a third-party provider Open AI Vs Samsung and Google who have developed their own AI offering.
Apple launched iOS 18.1 Beta with Apple Intelligence fin mid-September, but the delay in delivering the full set of features is now having a significant impact on sales claim observers.
Barclays analysts noted, “We think Sep-Q iPhone units are on track for 51M as the best case (consensus and Barclays both at 51M for Sep-Q estimate), assuming some channels fill in line or better vs. last year due to more selling days. We believe July and August sell-through has been flattish Y/Y.”
Another challenge for Apple is that Apple Intelligence has limited availability outside of the US and in markets such as Australia and New Zealand.
Coupled with the lack of significant design innovation Apples failure to deliver a new device that excites the market is now hurting revenues.
While the iPhone 16 and iPhone 16 Plus received a new camera layout, the iPhone 16 Pro and Pro Max models look very similar to their predecessors and consumers have noticed this claim retailers.