In an investor note spotted by 9to5Mac, analysts at Barclays report that Apple seemingly just cut the iPhone 16 production by three million units. According to supply channel checks, the analysts say that the cuts were made for a semiconductor component.
The iPhone 16 production cut could be due to a lack of demand for it
Specifically speaking, Barclays suggests that these checks suggest that the iPhone 16 shipments will decline by 15 percent year-over-year. However, the performance for the previous quarter will be on par with earlier expectations. The report also mentioned that the September quarter for the iPhone 16 shipments will bring 51 million units and that the iPhone 16 models have two additional days of sell-through compared to the iPhone 15 models.
Regarding the last quarter of the year, the iPhone 16 shipments appears to be at risk. This statement is based on information derived from the Barclays’ report. As mentioned, the December quarter for the iPhone 16 shipments “looks increasingly at risk”. This is because Apple has cut down orders for the iPhone 16 production.
According to the analyst, the lack of demand for the iPhone 16 could be due to the poor rollout strategy of Apple Intelligence. For those unfamiliar, the AI features will be released in stages. The company released iOS 18.1 Beta with Apple Intelligence for iPhone 16 towards the middle of last month. However, the fact that many of the product’s new capabilities were unavailable at launch may have contributed to “softer” demand.
The absence of Apple Intelligence seems to be the key reason
“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 channel 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,” one of the analysts noted.
Apple Intelligence could arrive this month. However, the features will roll out in different updates. In addition to that, Apple Intelligence or any AI features will have limited availability outside of the United States, which has the potential to affect the global shipments of the iPhone 16 series.
The lack of innovation in terms of design could also be a reason behind the lack of demand for the latest iPhones. While the refreshed camera layout gives the iPhone 16 and iPhone 16 Plus a new look, the iPhone 16 Pro and the iPhone 16 Pro Max look almost the same as their predecessors.
