Kuo again predicts doom for new iPhone because of order cuts

Posted:
in iPhone

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 desert, natural, and white titanium iPhone 16 Pro phones held against a textured wood background
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

  • Reply 1 of 15
    ssfe11ssfe11 Posts: 100member
    I’m about as confused as everyone else must be. Kuo is absolutely all over the place lol
    nubusmagman1979
  • Reply 2 of 15
    JFC_PAJFC_PA Posts: 947member
    Bottom line his doomed track record is pretty consisten; doomed to innacuracyt: he’s got to have cost his clients a fortune unless they simply use him contrarian. 
    ssfe11danoxmagman1979
  • Reply 3 of 15
    At this point does anyone NOT believe that these 'analysts' are simply working to manipulate the market? Sell, buy, sell, buy. Liquidity for funds that needs monthly income. It's a near completely corrupt system. It's manipulation and if they ever cracked down on these grifters the market would be 'less liquid' which means financial institutions wouldn't manufacture profit for themselves as easily.
    ssfe11williamlondonDAalseththtralphiemuthuk_vanalingamdewmemagman1979
  • Reply 4 of 15
    ssfe11ssfe11 Posts: 100member
    Just simply go Long and avoid any manipulation. Don’t step into the ring with these guys and start trading. That’s exactly what they want. Don’t give in to the trading temptation. 
    aderutterstevenozmagman1979
  • Reply 5 of 15
    anonymouseanonymouse Posts: 6,965member
    He's probably got only half the story.

    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."
    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.
    aderutterssfe11magman1979
  • Reply 6 of 15
    charlesncharlesn Posts: 1,132member
    Oh, c'mon William! Do better. First you (justifiably!) criticize Kuo for being sketchy, for stating the known obvious (Pro models are doing better!), not to mention inconsistent with what he just said a couple of weeks ago. And then you lob THIS into your article as a statement of fact: 

    "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. 


    williamlondonssfe11dewmemagman1979
  • Reply 7 of 15
    Kuo is good at predicting Apple product release features. His financial predictions are not “all over the place.” They are awful. He routinely misses by a mile, almost always on predicting iPhone sales numbers. 
    ssfe11thtmagman1979
  • Reply 8 of 15
    A comparison with other brands budget/midrange phones would be good, AppleInsider… The general perception seems to be the standard iPhone models are now just a budget specced phone and seriously overpriced. 
  • Reply 9 of 15
    Apple intelligence was never meant to boost sales. It’s simply logical progression and ensures apple stays in the tech lead. Not a sales driver. Apple can’t stand still and expect to keep their status. That’s why they’ve continually innovated and refined year after year for decades now. Apple intelligence isn’t a gimmick. It’s a value-add that further differentiates the Apple experience. 
    edited October 23
  • Reply 10 of 15
    PemaPema Posts: 141member
    Without getting into Kuo's assessment or numbers, I wholeheartedly agree as I have been saying from day 2 after the purchase/return of the iPhone 16 Pro. It is not a hit. I am holding out for the iPhone 17 Pro SLIM. 

    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.

    1. This for 4th Quarter for 2024 - the quarter that the 16 was released in = The rest of that overall 10 million drop is from 4Q24 dropping from 84 million to 80,
    2. This is for 1st Quarter 2025 - 1Q25 down from 48 million to 45 million.
    3. And for 2Q24 dropping from 41 million to 39 million. Huh? 2nd Quarter 2024. Are we doing a flashback to 2024 Second Quarter? 
    dewme
  • Reply 11 of 15
    DAalsethDAalseth Posts: 3,017member
    Pema said:
    Without getting into Kuo's assessment or numbers, I wholeheartedly agree as I have been saying from day 2 after the purchase/return of the iPhone 16 Pro. It is not a hit. I am holding out for the iPhone 17 Pro SLIM. 
    Not looking at the slim, or whatever it’s called. 17 Air maybe? But I am also holding onto my existing one for another year. I was all set to jump to the 16, but when it rolled out I just didn’t see enough there to warrant the expense. 
  • Reply 12 of 15
    charlesncharlesn Posts: 1,132member
    Pema said:
    Without getting into Kuo's assessment or numbers, I wholeheartedly agree as I have been saying from day 2 after the purchase/return of the iPhone 16 Pro. It is not a hit. I am holding out for the iPhone 17 Pro SLIM. 

    Hilarious. Nevermind that rumored sales of the 16 Pro models, even from the usual Apple skeptics, are said to be just fine and in-line with expectations. You've decided it's "not a hit" even before its marquee feature is released. Tell us: since the specs, features and design of the 16 Pro were all well-known before release, why did you purchase it in the first place? What did you read about the 16 Pro that motivated you to drop $1K+ on buying it that failed to live up to expectations once you had it? Hmmmmm?

    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. 
  • Reply 13 of 15
    MarvinMarvin Posts: 15,479moderator
    At this point does anyone NOT believe that these 'analysts' are simply working to manipulate the market? Sell, buy, sell, buy. Liquidity for funds that needs monthly income. It's a near completely corrupt system. It's manipulation and if they ever cracked down on these grifters the market would be 'less liquid' which means financial institutions wouldn't manufacture profit for themselves as easily.
    Some of the people who do it have described how they do it (3:36 they talk about Apple):



    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
    muthuk_vanalingam
  • Reply 14 of 15
    danoxdanox Posts: 3,368member
    A day later Apple is number two in the Chinese market with 15.6% marketshare, what’s going on as usual no one knows except the companies actually selling products in China.
  • Reply 15 of 15
    thttht Posts: 5,659member
    There's always a media story involving Apple's ramp down in iPhone units following the holiday quarter, and always someone trying to make it a controversy.

    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.
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