Apple’s iPhone Demand Facing Challenges

Investing.com — Apple’s new iPhones haven’t captivated consumers, according to UBS. As demand remains subdued, the upcoming release of Apple Intelligence and post-earnings comments are crucial for the future outlook on iPhone demand.

UBS's 'evidence lab' data tracks iPhone availability in 30 regions, indicating a softer demand compared to last year, a week before Apple Intelligence’s anticipated launch on October 28th.

Wait Times as Demand Indicators

Wait times for the iPhone 16 Pro Max are currently about 17 days in the US and 16 days in China, which is lower than the previous year’s 22-day wait. This is alarming, especially as consensus anticipates a 4% rise in average selling prices to $928 in fiscal year 2025, and another 2% increase to $943 in fiscal year 2026. However, weaker demand poses significant threats.

Moreover, the introduction of the more affordable iPhone 16 SE may further affect these expectations if consumers lean toward less expensive models.

Recent data from the International Data Corp. slightly alleviated concerns regarding weak demand in China, as Apple holds a 15.6% market share, down from 16.1% the previous year.

Critical Week Ahead

The upcoming week is critical for gauging demand with the rollout of Apple Intelligence and quarterly results scheduled for October 31.

Failure for Apple Intelligence to resonate with consumers could result in a potential 10% reduction in iPhone production until 2025, alongside shortened wait times for the 16 Pro Max. This could risk performance not only for the December quarter but also for the March and June quarters. Additionally, anticipated demand for the iPhone SE variant may further pressure average selling prices amid sluggish unit growth, UBS noted.

In recent trading, Apple Inc (NASDAQ:AAPL) showed slight gains on Friday.