Investing.com — Apple Inc (NASDAQ:) may have reduced its iPhone 16 production orders by approximately 3 million units at a key semiconductor component supplier for the December quarter, Barclays analysts said Tuesday, suggesting “weak demand” for the newest model.
Apple shares fell more than 1% in premarket trading.
If confirmed, this would mark “the earliest build cut in recent history,” analysts noted.
“Our sell-through checks point to 15% declines Y/Y for global iPhone 16 in the first week of sales,” they continued. “We also tracked iPhone availability across geographies globally, which suggests softer demand for IP16 relative to last year.”
Moreover, wait times across major geographies were significantly shorter compared to last year.
“While the supply chain constraints on IP15 pro models extended lead times last year, it nevertheless points to potentially weaker-than-expected demand, especially across US and China. All of the above data points point to softer demand than previously anticipated,” analysts remarked
Barclays maintains an Underweight (UW) rating on Apple’s stock, citing a mix of negative factors such as weaker consumer spending, macroeconomic pressures, and increased competition.
Furthermore, the delayed rollout of Apple Intelligence, particularly in the Chinese language not expected until 2025, may dampen enthusiasm for the iPhone 16 in China, a key market for Apple. Europe is also expected to experience a staggered launch of the new AI features through 2025, potentially limiting the new device’s appeal.
Barclays projects iPhone unit sales for the September quarter to reach 51 million, matching both consensus and Barclays’ own estimates. This projection assumes some channel fill, potentially benefiting from more selling days compared to last year.
The earlier launch of the iPhone 16 adds two days of sales to the September quarter, but analysts say that this factor is already widely known.
Nevertheless, the December quarter appears to be “increasingly at risk” with the recent order cuts if sell-throughs continue to be underwhelming, Barclays notes, due to “staggered roll-out of Apple Intelligence, limited adoption of AI outside of the US and lack of hardware differentiation.”
The investment bank said they will continue to monitor iPhone 16 sell-through data, lead time dynamics, and customer feedback on Apple Intelligence following its rollout in October.
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