Apple needed the iPhone 16 as a significant boost after years of slow iPhone sales growth. Gone are the years when loyal Apple fans would line up almost every year to replace their devices. The company hasn’t given consumers a significant reason to upgrade their devices since adding 5G connectivity to the iPhone 12. They hoped that a package of new software features integrating artificial intelligence would be a hit.
However, despite several spectacular launch events, it’s unclear whether Apple has succeeded in convincing consumers.
Apple sold only an estimated 37 million units in the first weekend of pre-sales of the iPhone 16, a drop of more than 12 percent compared to the same period last year, according to a blog by Ming-Chi Kuo, an Apple analyst at TF International. Specifically, demand for the more expensive iPhone 16 Pro devices has fallen compared to the launch of the iPhone 15 series, CNN reports.
More than the number of devices customers bought during the pre-sale season, Apple might be more concerned about which phones in the iPhone 16 lineup consumers are choosing, given that upgrades to the standard devices make them quite comparable to the Pro models. Analysts say there seems to be higher demand for the cheaper iPhone 16 and iPhone 16 Plus devices than for the Pro and Pro Max, which could impact the average sales price and total iPhone revenue.
Pro model sales are declining
In the first weekend of pre-sales, Apple sold 9.8 million iPhone 16 Pro and 17.1 million iPhone 16 Pro Max devices, a drop of 27 percent and 16 percent, respectively, compared to last year. In comparison, sales of the standard iPhone 16 and Plus slightly increased compared to the iPhone 15.
The problem, according to CFRA Research analyst, Angelo Zino, is that the basic iPhone models might be too good.
“Since this is mostly a software upgrade cycle, I’m concerned that there was a higher proportion of sales in the cheaper iPhone 16 than in the more expensive devices,” Zino said. “When you look at the standard devices, they received a really great upgrade in terms of cameras and internal processors.”
Kuo also reported shorter delivery times for iPhone 16 Pro models—1-2 weeks for the iPhone 16 Pro during the first weekend of pre-sales—compared to the iPhone 15, where customers waited 3-4 weeks for their devices. He pointed to the much-touted AI features, “Apple Intelligence,” which are not yet available on the devices (expected to be rolled out in beta next month along with iOS 18.1), as well as the company’s ongoing struggle with increased competition in China.
Artificial intelligence features are not a strong enough motivation to buy a new device
The pre-sale response might suggest that the mere promise of integrated AI features is not enough to pull Apple out of its iPhone troubles. Physically, Apple can only do so much to improve the iPhone camera or adjust the screen size, and software improvements, which many consumers are already skeptical of, are likely harder to sell. Aside from the most loyal Apple fans, analysts say that most buyers likely still don’t understand why AI features would be worth upgrading for.
More importantly, the metrics analysts use to assess may not necessarily tell the whole story. Many consider delivery time, the delay between when consumers order their devices and when they are delivered, a key indicator of demand. The logic goes: the more people who order iPhones, the longer the wait time will be.
Delivery times for the iPhone 16 are shorter than they were last year, which could be a positive sign that Apple has improved its supplier network, allowing it to produce more phones faster, according to Canalys analyst Lex Chiew. Zino from CFRA added that Apple may also have increased stock before the launch, given the pressure it faced to start a major upgrade cycle with the iPhone 16.
Another positive sign: T-Mobile CEO, Mike Sievert, told CNBC after the first week of pre-sales that the carrier sold more iPhone 16s than iPhone 15s last year.
