Weak Demand for iPhone 16

Investing.com — Demand for Apple Inc (NASDAQ:AAPL)’s iPhone 16 “remains weak,” according to Jefferies analysts in a Thursday note, with delivery lead times shortening across major markets.

Citing recent tracking data from October 8, delivery lead times for both the iPhone 16 Pro (16P) and iPhone 16 Pro Max (16PM) have decreased by 3 to 16 days across seven cities in China, including Hong Kong, compared to the previous tracking on September 29.

The delivery time for the 16P has decreased more significantly than for the 16PM, except in Hong Kong. On average, customers in China wait 23 days for the 16PM, while in Hong Kong, the waiting time is 18 days.

In the US, among the seven tracked cities, four saw reduced delivery times, two remained unchanged, and Philadelphia saw an increase of around two days. Similar to China, the 16P in the US experienced a greater reduction in delivery time compared to the 16PM.

Outside of these regions, there was a slight increase in delivery times in both Japan and the UK.

Simultaneously, resale prices for the new iPhone 16 in Hong Kong show that all variants of the 16P continue to trade below their official selling prices, according to Jefferies. For the 16P Max, all variants are now also selling at a discount, a change from September 29 when 6 out of 12 variants were priced above official rates.

“Although dealer interest has focused on only one variant – Desert Gold/256GB, even that most popular unit has dropped below the official selling price,” analysts indicated.

“Discussions with dealers suggest demand from both China and the Middle East is weaker than in previous years.”

Early data also indicates a double-digit decline in iPhone sales across all models in the two weeks following the start of deliveries.

“This is worse than our expectations, although it’s worth observing a longer period before making conclusions. We believe AAPL may discount older models more aggressively to boost volume if needed,” analysts stated.

Jefferies maintained a cautious outlook on Apple for the next 12 months but remains optimistic about the company’s long-term potential due to expected AI developments.