Industry supply chain analyst says Apple cut orders for the iPhone 16 for Q4 2024 and Q1 2025, prompting a share decline
Apple’s shares declined slightly on Wednesday after an analyst said the tech giant has scaled back production of its latest iPhone handsets.
CNBC reported industry supply chain analyst Ming-Chi Kuo as saying that Apple has cut orders for the iPhone 16 by about 10 million units for the fourth quarter of this year and the first half of 2025.
As a result, Apple shares fell about 2 percent on Wednesday. The production warning comes after another report earlier this week had stated that Apple had also since the early summer “sharply cut” back production of the Vision Pro headset.
Manufacturing cut
What is notable about the iPhone production cut warning from Ming-Chi Kuo is that it applies to the regular iPhone 16 instead of the iPhone 16 Pro models.
The iPhone Pro models typically have better displays and better cameras, and tend to be more popular with consumers.
“As a result, iPhone 16 production for 2H24 is now estimated at 84 million units,” Kuo reportedly wrote, noting that his estimate is down from about 88 million units.
According to CNBC, Kuo now forecasts that Apple partners will produce 80 million iPhones during the fourth quarter, down from around 84 million last year. He estimates production of 45 million units during the first quarter of 2025 and 39 million units during the second quarter, down from 48 million and 41 million, respectively.
“iPhone revenues are expected to come under pressure in 1H25 due to a YoY shipment decline and a less favourable product mix due to the launch of SE4,” Kuo said, referring to the iPhone SE 4 phone that he expects Apple to ship in December.
Apple’s iPhone SE models are usually the most affordable Apple handsets, but the tech giant does not refresh them on a regular basis.
For example the current iPhone SE (third generation) was released in 2022, whereas the first generation was released back in 2016.
Apple intelligence
One of the frustrations often expressed by YouTube reviewers of the current iPhone 16 is that there is not enough reason to justify upgrading from the iPhone 15 handset.
The one exception to this is Apple Intelligence – Apple’s very late entry into the artificial intelligence (AI) arena.
‘Apple Intelligence’ is the tech giant’s name for its AI move, and it was only announced in June that it would bring OpenAI’s ChatGPT chatbot to devices including iPads, iPhones, Vision Pro headsets and Macs later in the year
The first devices to be Apple Intelligence compatible are the iPhone 15 Pro models, as well as iPhone 16 handsets – although this will only arrive with the iOS 18 update, due for American users next week.
“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,” Kuo said. “However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development.”
Apple did not immediately respond to CNBC’s request for comment.
