By Pavethran Batmanathen
Apple was counting on the new artificial intelligence (AI) features in the iPhone 16 to spark a surge in sales. However, early pre-sale estimates suggest a more restrained reception than the tech giant had anticipated.
After several years of underwhelming iPhone sales, Apple needed the iPhone 16 to be a hit. The days when loyal fans eagerly lined up for the latest iPhone model every year have faded, and since the introduction of 5G with the iPhone 12, Apple hasn’t given consumers a compelling reason to upgrade.
This year, the company banked on a set of AI-driven software enhancements to reignite interest.Despite flashy launch events, Apple appears to have struggled to fully convince consumers of the iPhone 16’s merits. Ming-Chi Kuo, a well-known Apple analyst at TF International Securities, reported that Apple sold an estimated 37 million units in the first weekend of pre-sales—a drop of over 12% compared to the same period last year.
Demand for the higher-end iPhone 16 Pro models, in particular, took a significant hit compared to the iPhone 15 launch.Wedbush analyst Dan Ives offered a slightly higher estimate, suggesting pre-sales reached around 40 million units.
However, CFRA Research technology analyst Angelo Zino noted that early data still points to a year-over-year decline in pre-sales.Apple may have more to worry about than just the number of units sold. Analysts have observed that customers are gravitating toward the lower-priced iPhone 16 and iPhone 16 Plus models, rather than the premium Pro and Pro Max versions.
This shift could affect the company’s average selling price and overall revenue. In fact, Kuo’s data shows that sales of the iPhone 16 Pro and Pro Max models fell by 27% and 16%, respectively, compared to last year’s iPhone 15 launch. In contrast, sales of the standard iPhone 16 and Plus models saw a slight increase.Zino expressed concern that the base iPhone 16 models might be too appealing, given their substantial camera and processor upgrades.
He remarked, “With this being primarily a software upgrade cycle, we’re seeing a higher mix of sales in the lower-priced iPhones, which could affect Apple’s revenue.”One factor contributing to the softer demand for the Pro models is the shorter delivery lead times. During the first weekend of pre-sales, lead times for the iPhone 16 Pro were only 1-2 weeks, compared to 3-4 weeks for the iPhone 15 Pro models last year.
Kuo suggested that the delayed rollout of Apple’s much-touted AI features, set to launch in beta with iOS 18.1 next month, may be a contributing factor. Additionally, Apple continues to face intense competition in China, further dampening sales.Zino also pointed out that consumers may need time to fully appreciate the value of the new AI features.
“It will take a few quarters for word of mouth to spread and for consumers to understand the benefits of the new technology,” he said.While Apple’s pre-sale numbers hint that the promise of AI integration may not be enough to pull the company out of its iPhone sales slump, it’s still early days for the iPhone 16. The device officially hit stores on September 20, and sales have continued since then.
Moreover, some analysts argue that shorter lead times may actually indicate positive improvements in Apple’s supply chain. Lex Chiew, an analyst at Canalys, suggested that Apple’s ability to produce and deliver more devices faster could be a sign of better supply chain management.
Additionally, CFRA’s Zino mentioned that Apple likely boosted its supply ahead of launch to meet high expectations for the iPhone 16.There are other bright spots as well. T-Mobile CEO Mike Sievert reported stronger iPhone 16 sales in the first week of pre-sales compared to the iPhone 15.
And while Apple won’t reveal official sales numbers until its earnings report next month, most analysts remain optimistic about the iPhone 16’s performance in the months ahead, especially with the holiday season approaching.Dan Ives of Wedbush remains bullish, stating,
“It’s all about a monster holiday quarter, and we believe the supercycle for the iPhone 16 is just beginning.” Despite a slow start, the iPhone 16 could still turn things around as the year progresses.
