In a recent update for investors shared by 9to5Mac, Barclays analysts disclosed that Apple has potentially reduced its production targets for the iPhone 16 by three million units. This information stems from their evaluations of current supply channels, indicating adjustments at a crucial semiconductor partner responsible for iPhone manufacturing during the December quarter.
According to Barclays, preliminary analyses show that the sales performance of the iPhone 16 is expected to drop by 15% compared to last year’s launch.
For the third quarter ending in September, Barclays anticipates that iPhone shipments will reach approximately 51 million units, covering the months of July, August, and September. Notably, this year’s iPhone 16 launch benefits from an additional two days of sales compared to the previous iPhone 15 launch (11 days this year versus nine last year).
Looking ahead to the December quarter, however, potential challenges loom for iPhone shipments due to the recent production cuts. Analysts at Barclays point to factors such as the “phased introduction of Apple Intelligence,” limited AI usage beyond the US, and a lack of significant hardware innovation as causes for the declining demand for the iPhone 16.
For the September quarter, we project iPhone units will hit 51 million, aligning with the consensus and Barclays estimates, contingent on comparable channel performance to last year given the increase in selling days. We believe sales during July and August have remained relatively unchanged year-over-year.
Insights from 9to5Mac
I’m somewhat skeptical about placing too much weight on the findings from Barclays, particularly due to their focus on lead times. A large part of their analysis hinges on the observation that “wait times in several major regions were significantly shorter” for the iPhone 16 compared to the iPhone 15 in the previous year.
In my view, order wait times are not necessarily an accurate reflection of actual iPhone demand. Various factors influence these metrics, making it unsuitable to solely rely on them as indicators of whether demand for iPhones is robust or lacking in any given year.
That said, the detail that Barclays points out a three-million-unit cut at a “critical Taiwanese supplier” is an important consideration. Apple is scheduled to disclose its fiscal Q4 2024 earnings in early November, followed by its Q1 2025 earnings in early February.
