Shorter lead times suggest iPhone 16 is least popular since the iPhone 12

AppleInsider

A survey of lead times has led investment bank Morgan Stanley to claim that iPhone 16 orders are lower than for its predecessors.

The new larger iPhone 16 Pro and Pro Max

The iPhone 16 and iPhone 16 Plus may have sold 37 million in their first weekend, and Russians are ordering more despite that country facing much higher prices on iPhones. In a message to investors that has been seen by AppleInsider, Morgan Stanley says that its surveys show iPhone 16 demand is lower than before.

Specifically, on average, those lead times (compared to 2023's ) are:

• iPhone 16 Pro Max 25.5 days (instead of 43.5 days)


• iPhone 16 Pro 18.5 (instead of 32.5)


• iPhone 16 9 (instead of 14)


• iPhone 16 Plus 7.9 (instead of 13.9)

"When we aggregate all of our iPhone lead time data," says Morgan Stanley, "average iPhone 16 lead times from pre-order to today stands at 14 days, shortest amongst all cycles in the last 5 years and roughly in-line with the iPhone 12 cycle."

Morgan Stanley does conclude that it believes we are more than 50% likely to see Apple cut its supply orders. However, the analysts also maintain that lead times early on in a product's lifespan "still have very limited predictive power."

Lead times are always dependent on how much stock Apple has -- and Apple never reveals this figure. So it's possible that Apple has actually done a better job at manufacturing sufficient iPhones for the demand it has.

Comparing lead times for the iPhone 16 range and older. (Source: Morgan Stanley)

However, there are practical limits to manufacturing and on Apple's schedule. While it cannot ever be conclusive, it's at least partially reasonable to compare any one year's iPhone to previous ones.

Consequently, comparing the iPhone 16 range to earlier years, the iPhone 16 Pro Max has a lead time 14 days shorter than the iPhone 14 Pro Max, and 7 days shorter than the iPhone 13 Pro Max. The iPhone 16 Pro's lead times are 14 days shorter than the iPhone 15 Pro, iPhone 14 Pro, and iPhone 13 Pro.

Separately, Morgan Stanley reports that initially users appear to be upgrading because of having old phones, or looking for the improved battery life and camera systems of the new models. They are not, so far, buying because of Apple Intelligence -- though Morgan Stanley recognizes that only a few people surveyed will have been using the beta version of iOS 18 with that.



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daalseth

However, the analysts also maintain that lead times early on in a product's lifespan "still have very limited predictive power."

Very true. Apple strives to reduce lead times so it is a moving target. That said, it does line up with things I’ve been seeing on multiple sites. The excitement isn’t there. I’m seeing a lot of people saying they’ll stick with their 15, (14, 13…) for another year. 

chasm

Maybe he’s right, at best.

Not saying this isn’t Apple’s own fault, but when Apple Intelligence fully arrives post-Xmas/early 2025 we may see a pickup in sales. Anyone with an iPhone 13 or newer should absolutely be looking at upgrading, it’s time. People who bought the iPhone 15 Pro or Pro Max are busy patting themselves on the back.

carmb

Could it be that Apple overestimated the initial interest in the iPhone 16 based on the addition of Apple Intelligence in the coming months? If so, shorter lead times does not automatically mean the iPhone 16 is not selling well. They may have set up for higher demand and are now seeing shorter lead times as a result. It's certainly reasonable to posit that we will not see a lot of demand for the new models as a result of AI at this time on account of the AI features are not yet available. It's also the case that those features, to be of interest, consumers have to feel there is a meaningful upgrade in the user experience. With few users in the wild having access to Apple Intelligence, how is that supposed to happen exactly.  Apple plays a long game, one that has proven effective yet isn't for those looking for dramatic instantaneous results. Take the Apple Watch as an example. Initially it didn't seem like it was all that big a deal but today many - myself included - regard the device as indispensable. Over time, Apple has enhanced the value of the product and afforded upgrades to products several years old. My fourth-generation watch only now is ineligible for any future upgrades but I've had it for several years and it still does what it does. I'll probably upgrade to a new one in the next year or so. AI will be like that. Start off modestly but evolve into an indispensable must-have that will motivate current long-time iPhone owners to upgrade. It's just not going to happen all at once. 

kdupuis77

CarmB said:

Could it be that Apple overestimated the initial interest in the iPhone 16 based on the addition of Apple Intelligence in the coming months? If so, shorter lead times does not automatically mean the iPhone 16 is not selling well. They may have set up for higher demand and are now seeing shorter lead times as a result. It's certainly reasonable to posit that we will not see a lot of demand for the new models as a result of AI at this time on account of the AI features are not yet available. It's also the case that those features, to be of interest, consumers have to feel there is a meaningful upgrade in the user experience. With few users in the wild having access to Apple Intelligence, how is that supposed to happen exactly.  Apple plays a long game, one that has proven effective yet isn't for those looking for dramatic instantaneous results. Take the Apple Watch as an example. Initially it didn't seem like it was all that big a deal but today many - myself included - regard the device as indispensable. Over time, Apple has enhanced the value of the product and afforded upgrades to products several years old. My fourth-generation watch only now is ineligible for any future upgrades but I've had it for several years and it still does what it does. I'll probably upgrade to a new one in the next year or so. AI will be like that. Start off modestly but evolve into an indispensable must-have that will motivate current long-time iPhone owners to upgrade. It's just not going to happen all at once. 

I think they did overestimate. Especially in the present economic environment, your average consumer is not going to update and iPhone less than 5 years of age right now. Furthermore, had some of the Apple Intelligence features actually launched with the 16 series (and they worked well and did "amazing" things), perhaps some of those people could've been spurred to upgrade if able. At this point, some of us can't even use the newest 11" iPad Pro because of issues with Apple updates, Apple Intelligence being released in a useful and usable/reliable state is likely so far off at this time. Lately Apple seems to get a pass for touting "amazing" new features "coming soon" to get people to upgrade and then after all the delays, when said feature finally drops it sucks. Case in point: Apple Watch Series 9 and DoubleTap.

ssfe11

To make assumptions about demand based upon lead times seems pretty desperate. I know that’s all the analysts have to go on since Apple is so tight lipped and they are grasping at anything. I get it. However when the CEO of the second largest carrier says iPhones sales are very strong, the reports of weak demand is “nonsense” and the pros are crushing it I believe that. Why? because this guy is on the front lines and he needs to be very careful as to what he says or the SEC comes knocking. Also those lines were amazing over the weekend and that says a lot too. 

edited September 2024

ssfe11

Also. This year IS different by Apple Intelligence. With AI rollout over next 1,2,3 months etc Apple probably produced more supply to cover the AI rollout demand and which obviously did not exist in the past. Cannot compare this year with prior years as AI is now involved. It’s apples to oranges.  

edited September 2024

grandact73

After the unmitigated disaster of an event on Sep 12, no one should be surprised by this.

daalseth

grandact73 said:

After the unmitigated disaster of an event on Sep 12, no one should be surprised by this.

OK I’ll bite. what happened on Sept 12? The iPhone event was on the 9th. 

williamlondon

DAalseth said:

grandact73 said:

After the unmitigated disaster of an event on Sep 12, no one should be surprised by this.

OK I’ll bite. what happened on Sept 12? The iPhone event was on the 9th. 

Don't bother, he's a troll that spews nonsense wrapped in negativity.

maltz

I've never understood using lead times as a predictor of sales numbers.  Lead times indicate how far behind manufacturing is in relation to sales.  It says nothing about manufacturing capacity or sales at all, only the moment-in-time ratio between them.  It's like trying to calculate a vehicle's range from just its MPG, without knowing the size of the tank.

It seems to me that the only thing we can really say about short lead times is that Apple's sales forecasts (whatever those were) were more accurate than usual.

dewme

I’m still not convinced that Apple Intelligence is going to make much of a difference to Apple’s iPhone sales for the next year or so. Regular people don’t really know what it is. They don’t watch WWDC presentations like we do. It’s going to take a while for the masses to figure out what it really is, much less make it an essential part of their everyday life. It’ll eventually happen, but the iPhone 16 is synonymous with Apple Intelligence 1.0 and Apple rarely gets everything right on the first try. 

eriamjh

We do not know of Apple’s supply chain, anything about how they’ve produced more or less than before, or anything about orders.   It is an interesting data point in itself. 

We’ll probably get a little blurb about it from Tim at the Quarterly results call but no numbers because it will only be a few days of sales before the quarter ends (which is Monday).  

Apple sells millions of phones per week all year.    Let’s see what they say in February about how things are going.   

edited September 2024

applezulu

Scrutinizing the numerator when you don’t know the denominator is pure folly. 

omasou

Or maybe, just maybe Cook (remember he was COO) correctly manufactured the correct number of iPhones to meet demand and also correctly guessed that most would opt for Pro models this time around thinking it would be best for future Apple Intelligence features to come.

Just saying.

cesar battistini maziero

The iPhone got too good.

pema

ssfe11 said:

To make assumptions about demand based upon lead times seems pretty desperate. I know that’s all the analysts have to go on since Apple is so tight lipped and they are grasping at anything. I get it. However when the CEO of the second largest carrier says iPhones sales are very strong, the reports of weak demand is “nonsense” and the pros are crushing it I believe that. Why? because this guy is on the front lines and he needs to be very careful as to what he says or the SEC comes knocking. Also those lines were amazing over the weekend and that says a lot too. 

The lines just got shorter by one iPhone 16 Pro. I bought mine on Friday and returned it on Saturday. 
I am waiting on the 17 Pro - that's the one. So there. 

eriamjh

Probably too heavy for you.   

beowulfschmidt

DAalseth said:

However, the analysts also maintain that lead times early on in a product's lifespan "still have very limited predictive power."

Very true. Apple strives to reduce lead times so it is a moving target. That said, it does line up with things I’ve been seeing on multiple sites. The excitement isn’t there. I’m seeing a lot of people saying they’ll stick with their 15, (14, 13…) for another year. 

I like that they admitted that "we might be talking out of our ass on this one..."

I think there's two major factors.  One is, as you mention, more people are keeping their phones for longer.  Another is, IMO, that Apple was up front about the fact that the Apple Intelligence stuff wasn't going to be present at launch.  Absent that, there is even less incentive for those with a recent phone to upgrade.  When Apple Intelligence releases, I expect to see at least a small surge in sales.

I have an iPhone 11, and even I am waiting to see what that brings.