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Read the latest: Apple’s iPhone 16 is in stores now — but it’s missing a key selling point
Despite high hopes for Apple’s (AAPL+2.31%) artificial intelligence push, Apple Intelligence hasn’t seemed to convince people to get their hands on the iPhone 16.
“Apple employees can already purchase the iPhone 16 with their employee discount,” TF Securities analyst Ming-Chi Kuo said in a post on X Wednesday. “Typically, employees have had to wait several weeks after the release of new iPhone models before being able to buy. This could be another sign that the early demand for the iPhone 16 is below expectations.”
In the first weekend since its debut, Apple sold about 37 million iPhone 16 smartphones — down nearly 13% from iPhone 15 first-weekend sales a year ago, Kuo said in a blog post Monday.
Kuo attributed the slower first-weekend sales to lower-than-expected demand for the iPhone 16 Pro lineup, largely because of the staggered released of Apple Intelligence.
“One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release,” Kuo said.
An analysis of pre-orders by Jefferies (JEF-1.99%) released Wednesday found that demand for the new iPhone lineup is slowly beginning to improve in the U.S., with delivery times for the iPhone 16 Pro reaching two to three weeks in seven major cities analyzed by the investment bank. But this is still below last year’s levels.
The slate of new AI features includes capabilities within Safari, Notes, Calculator, and, most notably, Siri for the iOS 18, iPadOS 18, and macOS Sequoia. But at its annual event last week, Apple confirmed that early Apple Intelligence tools, which will only be available on iPhone 15 Pro models or higher, will launch as a software update in beta in October, with more features rolling out in the following months.
Apple — and analysts — were betting that these new, long-awaited features would drive an upgrade “super cycle,” and mark a new era of growth for the tech giant. But recent research into the motivators behind upgrades found that a just 18% of consumers buy a new iPhone because of new features. A majority only opt to upgrade their smartphones once they become obsolete, or are stolen or damaged.
Much of this shortfall has come from China, where Apple is facing what Kuo called “intense competition,” particularly from Huawei and other homegrown rival smartphone makers.