iPhone 16 won't be compelling and Apple will get hurt because of it, says Kuo

Posted:
in iPhone edited January 30

Apple's shipments of iPhones may drop by up to 15% because of multiple issues including the iPhone 16 not being a compelling upgrade, according to analyst Ming-Chi Kuo.

iPhone 15 Pro Max
iPhone 15 Pro Max



Reports have proposed that Apple has already started to adjust its iPhone shipments for the year, but in the view of one analyst, Apple will see a hefty drop in what it produces and shifts across the year.

In a Medium post by TF Securities analyst Ming-Chi Kuo, supply chain surveys indicates Apple has lowered its shipments of key semiconductor components down to around 200 million. This apparently equates to a 15% year-on-year decline, and the "most significant decline" among major phone makers in 2024.

Shipments of iPhone 15 models and the iPhone 16 later in the year will allegedly go down by 10% year-on-year and 15% year-on-year for the first and second halves of 2024.

The iPhone "faces structural challenges that will lead to a significant decline in shipments," Kuo reckons, "including the emergency of a new paradigm in high-end mobile phone design and the continued decline in shipments in the Chinese market."

This new paradigm is allegedly coming to the iPhone 17, not the iPhone 16. This includes catering for AI-driven experiences on smartphones, as well as a market demand for foldable devices which may not be coming even then.

Meanwhile, the Chinese market decline is credited to Huawei's return and the rise of foldable devices among high-end users. Apple's weekly China shipments have apparently declined between 30% and 40% year-on-year.

The analyst also expects that Apple won't be launching new models with "significant design changes" and a heavy lean towards designing for AI applications "until 2025 at the earliest." He warns that, until then, it will "likely harm Apple's iPhone shipment momentum and ecosystem growth."

Kuo has predicted iPhone sales drops for five consecutive years, which have not always happened. This appears to the largest drop year-over-year to date.



Read on AppleInsider

teejay2012
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Comments

  • Reply 1 of 59
    AAPL will underperform in this year. 
    Also after their tomorrow´s earning results, their stock may go down (a lot).
    twolf2919williamlondongrandact73
  • Reply 2 of 59
     Oh no another Apple is doomed article.   For one I only know a few people that have a folderable phone and they are not big fans of it so far.  This market is very niche right now.   I think Kuo is jumping the gun on his iPhone negatively.  
    pulseimagesgregoriusmwilliamlondonmike1danoxForumPostmacxpressteejay2012StrangeDays
  • Reply 3 of 59
    kmareikmarei Posts: 179member
    "the iPhone 16 not being a compelling upgrade"

    so pretty much the same as iphone 12, 13, 14, 15 etc?
    unless you really care about how many cameras on the back?
    MplsPmike1
  • Reply 4 of 59
    If the iPhone 16 Pro would get the telephoto camera of the iPhone 15 Pro Max (or even better), I am sure Apple will sell a lot of iPhone 16 Pro.
    edited January 30 libertyandfreegregoriusmwilliamlondonmuthuk_vanalingamTomPMRI
  • Reply 5 of 59
    royboyroyboy Posts: 458member
    Most people don’t buy or not buy a cellphone based gloom & doom reports.  Most buy a cellphone when they need a new cellphone.  So gloom & doom reports be damned!
    MplsPgregoriusmhammeroftruthwilliamlondonmuthuk_vanalingamretrogustodanoxForumPostshrave10NYC362
  • Reply 6 of 59
    avon b7avon b7 Posts: 7,654member
    I think it's a little early for these kinds of forecasts.

    There are definitely headwinds and running with TSMCs latest nodes might make it difficult to push prices down a bit in a crunch. 

    Far from the couple of million a month that some here have claimed, it seems Huawei has shipped over 30 million Mate 60 devices to date. 

    Just today rumours hit that the Mate 70 is being lined up to go head-to-head with the iPhone 16 in September.

    Huawei has also said it will launch some 'disruptive' technologies this year. 

    Not having a folding or flip phone is definitely an issue to contend with as that market is not showing signs of a slowdown.  How much of an issue is a different story.

    It seems clear now that Apple was caught on the back foot with AI.

    All in all, Apple has work to do in China but it's way too early to say that huge drops in sales will be the order of the day. 
    twolf2919muthuk_vanalingamOnPartyBusiness
  • Reply 7 of 59
    MplsPMplsP Posts: 3,921member
    kmarei said:
    "the iPhone 16 not being a compelling upgrade"

    so pretty much the same as iphone 12, 13, 14, 15 etc?
    unless you really care about how many cameras on the back?
    royboy said:
    Most people don’t buy or not buy a cellphone based gloom & doom reports.  Most buy a cellphone when they need a new cellphone.  So gloom & doom reports be damned!
    Smartphones are a largely mature product at this point. Yes there are tweaks to the cameras and every year Apple comes out with some new color (with the obligatory pause during the unveiling for the audience to clap obligatorily,) but as @kmarei said, there haven't been many significant changes in the last few years. On top of that, one of the benefits of iPhones is that they are durable and have a long useful life. I would be shocked if the people at Apple aren't already well aware of this and planning accordingly. It appears Ming-Chi Kuo is the last to know?
    gregoriusmStrangeDaystht
  • Reply 8 of 59
    xyzzy-xxx said:
    If the iPhone 16 Pro would get the telephoto camera of the iPhone 15 Pro Max (or even better), I am sure Apple will sell a lot of iPhone 16 Pro.
    I think most iPhone Pros sold are Max models - especially in Apple's biggest market, China.  So unless the 16 Pro Max has a significantly better camera, I'd agree with Kuo that the 16 isn't a compelling upgrade.
    williamlondon
  • Reply 9 of 59

    MplsP said:
    kmarei said:
    "the iPhone 16 not being a compelling upgrade"

    so pretty much the same as iphone 12, 13, 14, 15 etc?
    unless you really care about how many cameras on the back?
    royboy said:
    Most people don’t buy or not buy a cellphone based gloom & doom reports.  Most buy a cellphone when they need a new cellphone.  So gloom & doom reports be damned!
    Smartphones are a largely mature product at this point. Yes there are tweaks to the cameras and every year Apple comes out with some new color (with the obligatory pause during the unveiling for the audience to clap obligatorily,) but as @kmarei said, there haven't been many significant changes in the last few years. On top of that, one of the benefits of iPhones is that they are durable and have a long useful life. I would be shocked if the people at Apple aren't already well aware of this and planning accordingly. It appears Ming-Chi Kuo is the last to know?
    It's not a matter of whether Apple or Kuo are aware of it, it's a matter of whether AAPL investors are aware of it.  Apple stock is priced near all-time highs right now - despite the fact that iiPhone sales growth has all but disappeared and even going down in Apple's biggest market, China.  Combine this with geopolitical problems and you can see why the stop will drop.
    williamlondon
  • Reply 10 of 59
    AniMillAniMill Posts: 155member
    If the iPhone 16 Pro has the periscope lens camera, I’m upgrading my iPhone Mini 12. I don’t want the MAX. That’s what keeps me on my Mini. As for a foldable, I don’t think Apple is even considering one: they’re too delicate with easily damaged screens. I seem to remember a slew of tech journalists screaming, “Apple HAS to make a folding iPhone NOW!!!” No one cared. Apple saved money.
    TomPMRI
  • Reply 11 of 59
    Well… it’s time to upgrade for me, so…. I guess I’ll be one of the “few” customers. 
    gregoriusmTomPMRIteejay2012
  • Reply 12 of 59
     Oh no another Apple is doomed article.   For one I only know a few people that have a folderable phone and they are not big fans of it so far.  This market is very niche right now.   I think Kuo is jumping the gun on his iPhone negatively.  
    I do not know what you mean with "doomed".
    Every company has negative earnings, negative years, good earnings, good years etc.. Apple is not an exception.
    S*it happens, doesn´t it?

    The global economy does not look good in this year. 

    Apple has lost their market position in China. I don´t know how Apple will perform in China this year, but I would not be surprised if the market share decreases at Apple. 
    Apple has lost their momentum, because most of their (loyal) consumers already have and do not need to upgrade every year.

    iPhone 16 does not seem to be interesting either. Their Generative AI story is rather "meehhh". 
    AVP is still an early product. We may need min. 5 years for a clear direction of this purpose. 

    There is no big upgrade momentum in every category. iPad will an OLED screen, but it does not justify an immediate upgrade. 
    Apple Watch? After a fight with Massimo? I don´t know.

    I think the market is hyped with AI and there is no room for Apple.

    NVDA, MSFT, AMZN, GOOGL, and META have better year ahead. Apple will underperform.

    Honestly, I would not be surprised if NVDA surpasses AAPL one day on the market. (Everybody will laugh at me, but nobody knows).

    rax_markwilliamlondon
  • Reply 13 of 59
    avon b7 said:

    It seems clear now that Apple was caught on the back foot with AI.

    What are you basing this on?

    Apple has a lot of AI hiding in plain sight. Just because they aren’t like the rest of the market with their “me too” attitude about chatgpt doesn’t mean they don’t have AI already in place and waiting for bigger deployment. 

    Kuo doesn’t have a lot to go on. His best information is a good 3-4 levels away in the supply chain and not someone inside Apple
    because they’ve gotten good at plugging leaks. 

    Once you see the VP in person, you’ll get a better idea on the path Apple is going to take on AI and how it’s going to change the public’s perception of AI and VR compared to what’s available. 
    williamlondonjas99fastasleepStrangeDays
  • Reply 14 of 59
    Who cares. The only thing it is going to do is bring down Apple stock (which is highly overvalued at the moment), Apple will be fine. 

    As a user, I could care less about shareholders.
    williamlondon
  • Reply 15 of 59
    M68000M68000 Posts: 723member
    royboy said:
    Most people don’t buy or not buy a cellphone based gloom & doom reports.  Most buy a cellphone when they need a new cellphone.  So gloom & doom reports be damned!
    Correct. Also, most people do not know who “Ming-Chi Kuo” is. 
    williamlondon
  • Reply 16 of 59
    As usual... nice timing.
    teejay2012
  • Reply 17 of 59
    mike1mike1 Posts: 3,279member
    I'll definitely be looking to upgrade my 12 Pro this year. Hopefully, the smaller 16 Pro will have the improved telephoto camera.
    TomPMRI
  • Reply 18 of 59
    I used to replace my iPhone every year.   By the time iPhone 16 comes out my 13P will be over 3 years old.   Best as I have been able to determine ,worldwide, somewhere between 25 and 35% of all iPhones are more than 3 years old.   IMHO this is the year many will upgrade (including myself).

    The telephoto lens in the 16P will be the biggest feature upgrade, but for those of us that haven't upgraded the spatial audio/video capture will be valuable going forward (I pick up my VisionPro on Sat), and of course we have missed out on the already amazing cameras in the 15P.

    I feel the same way about my Mac's (all are Intel) and two of them will get replaced with an M3 Studio (I need ray tracing and vectors for my work).  The exception is my MBP with TouchBar, which I will keep until it dies.....
    TomPMRI
  • Reply 19 of 59
    avon b7avon b7 Posts: 7,654member
    avon b7 said:

    It seems clear now that Apple was caught on the back foot with AI.

    What are you basing this on?

    Apple has a lot of AI hiding in plain sight. Just because they aren’t like the rest of the market with their “me too” attitude about chatgpt doesn’t mean they don’t have AI already in place and waiting for bigger deployment. 

    Kuo doesn’t have a lot to go on. His best information is a good 3-4 levels away in the supply chain and not someone inside Apple
    because they’ve gotten good at plugging leaks. 

    Once you see the VP in person, you’ll get a better idea on the path Apple is going to take on AI and how it’s going to change the public’s perception of AI and VR compared to what’s available. 
    That’s the point. Nothing deployed. 

    Anything sitting in a back room means it isn't in the hands of users while others have shipping products. 

    2023 was the year of big launches in both generative and LLM AI. 

    Apple has had little show beyond ML which everyone has been using for years now.

    Some posters here (perhaps with friends inside Apple) have stated that Apple is rushing (maybe scrambling would be a better term) to inject these kinds of AI into the product matrix. 

    On that I can't speak, just indicate what some have said. 
    edited January 30
  • Reply 20 of 59
    AppleZuluAppleZulu Posts: 2,002member
    Kuo is such a reliable authority. I'm sure you're all reading this on your 2023 foldable iPhone, too, right?
    iOS_Guy80
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