Kuo again predicts doom for new iPhone because of order cuts
In a sketchy new report, analyst Ming-Chi Kuo concludes that Apple Intelligence is a failure because Apple may have cut iPhone 16 orders before release. Or something like that.
The new finishes for iPhone 16 Pro
Reporting Apple's iPhone orders is a dodgy business at the best of times -- even Ming-Chi Kuo has said some claims are weird. Apple switches suppliers, for one thing, and with a finite production capacity -- incredibly large, but still finite -- it also changes the mix of devices being made to match demand.
That last is perhaps what Kuo is reporting now. Writing on his blog, he says that "iPhone 16 orders were cut by around 10M units for 4Q24--1H25, with most of the cuts affecting non-Pro models."
Kuo says his figures are based on his own supply chain survey. He's now saying the industry will make 84 million iPhones in the second half of 2024, down from 88 million.
The rest of that overall 10 million drop is from 4Q24 dropping from 84 million to 80, 1Q25 down from 48 million to 45 million. And for 2Q24 dropping from 41 million to 39 million.
It all probably works out to a 10 million drop, anyway. Something like that.
Apple Intelligence has not boosted sales
What's more significant, says Kuo, is that this means Apple Intelligence is not going to be the big boost that Apple expected. At least, not at first.
"Apple's recent order cuts suggest this optimistic expectation may not materialize in the short term," writes Kuo. "I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service."
"However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development," he concludes.
It's true that iPhone 16 sales have been lackluster - in the US, at least, as they're high in China. It's also reportedly true that the iPhone 16 Pro models have fared better than the regular iPhones.
They would, though. They always do.
iPhone SE 4 will boost sales and dent revenue
Having painted a picture of the iPhone being under stress because of the yet-to-launch Apple Intelligence failing to improve sales, Kuo then goes the opposite way and says Apple will be fine.
"Apple's iPhone revenue in 4Q24 may not fully reflect the impact of production cuts," he writes, "as the gap between production and sell-through in 4Q23 was larger than in 4Q24, and the product mix in 4Q24 is more favorable (with increased production of the Pro Max model for Sep-Oct)."
That favorable product mix won't last, though, as Kuo sees Apple's revenues taking a hit because of the success he predicts for the expected iPhone SE 4 in early 2025.
The iPhone SE 4 is expected to support Apple Intelligence.
In recent years Ming-Chi Kuo's reports have varied between supply chain information, and extrapolation of Apple's plans. For once he has clearly said that his latest report is based on an industry survey, but at the same time he has a poorer track record for predicting Apple's plans.
Regardless, the tale will be partially told on October 31, when Cook and company announce earnings.
Read on AppleInsider
Comments
So, as AI points out, Apple changes the mix. Likely, based on other reports of strong Pro demand, Apple has cut non-Pro orders and boosted Pro orders, but Kuo only got the data on the cuts, not the increases. Another possibility is that Apple intentionally shifts orders around to flush out who's leaking data to whom.
"It's true that iPhone 16 sales have been lackluster"
Really? True according to whom? Turns out that active link goes back to Kuo, who you just criticized for a sketchy report which, honestly, is just par for the course with Kuo. And you gotta love that he's decided that Apple Intelligence isn't going to be a big driver of sales when Apple Intelligence has yet to reach a single phone--and the most significant AI features probably won't arrive til March or later. This is going to be a very different year when it comes to assessing the impact of a new iPhone's marquee feature on sales because its marquee feature wasn't available until nearly two months after launch and won't be fully released until more than midway through the model year.
Bottom line: Kuo's "predictions" are all over the map, so no matter what the actual truth turns out to be, Kuo can claim he was right. I don't care if you want to continue publishing his nonsense for entertainment value, but stop treating it as established fact.
I hope and pray that Apple does NOT make Samsung's catastrophic mistake or even Google's by releasing a fold. They are a total failure. Google has tried to flog theirs since last December and they have failed to pick up any traction. Samsung I can see from my weekly visits to my favourite retailers they are gathering dust alongside transparent toasters for $700. Nobody wants a toaster for $700 and nobody needs a bulky, foldable phone at $2500.
That aside this line from the article makes no sense:
The rest of that overall 10 million drop is from 4Q24 dropping from 84 million to 80, 1Q25 down from 48 million to 45 million. And for 2Q24 dropping from 41 million to 39 million.
Even more hilarious: You're "holding out" for a 17 Pro SLIM, a fantasy fever dream of the technosphere echo chamber that doesn't exist, even as a decent speculative render. And you do realize that even in the fever dream descriptions, this fantasy phone will strip away the Pro specs and features--and even the dual lenses of the regular iPhone--to accommodate the supposed thin design. Specs and feature-wise, you're essentially "holding out" for the iPhone SE Slim.
It maintains legitimacy because some people actually do track inventory and have inside contacts with suppliers but it's clearly a mixed bag. Reporting things that are credible builds trust and when there's a need to swing things one way or another, it can be manipulated.
It keeps happening because there's no accountability, no oversight over what is going on in the rich people's casino and there should be but the people tasked to regulate it not only get financial incentives from the players, some of the regulators like to play in the casino too.
They'd justify it by saying nobody is losing because of it, people have the choice to buy and sell when they want. If people think this news will create a downward turn, they can profit from it too, if not, bet against it.
The hedge funds tried to manipulate GameStop down with the same tactics, retail investors bet the other way and cost them a lot of capital:
https://edition.cnn.com/2022/05/19/investing/melvin-capital-hedge-fund-closes/index.html
We will definitely know when Apple has mispredicted their iPhone sales or will be significantly under analyst targets. They will announce it about 6 weeks before the end of the quarter.