Apple iPhone 16 Demand Assessment

Investing.com — According to a recent note from KeyBanc Capital Markets, the initial feedback for Apple (NASDAQ:AAPL)'s iPhone 16 suggests that demand is "not great, but not terrible either."

While there were concerns that pre-orders were down double digits year-over-year, KeyBanc reported that demand has not been as bad as some had feared.

Reasons for Demand

KeyBanc attributes the lackluster demand to:
– The absence of compelling functionality in Apple Intelligence
– Insufficient language support in key regions like China

Despite muted demand, supply chain partners have not seen any reductions in build plans, which currently stand at 89 million units, indicating a 2% year-over-year increase in the second half of 2024. This suggests that while enthusiasm may be low, Apple has maintained its production expectations.

Mixed Sentiments

The note highlights mixed results from KeyBanc's September carrier survey, stating that feedback on the iPhone 16 launch has been "slightly disappointing."

However, Apple Store spending data reveals a:
– 15% year-over-year increase during the first ten days of the launch
– 7% year-over-year rise during the launch weekend

These figures suggest some positive traction despite initial concerns.

Conclusion

Shortening lead times for the iPhone 16 are attributed to improved manufacturing yields rather than weak demand. Overall, while the outlook for the iPhone 16 isn't overwhelmingly positive, supply chain feedback indicates the situation isn't dire either. As KeyBanc summarizes, "Initial feedback for the iPhone 16 is not great, but not terrible either."