Barclays Suggests Slow iPhone 16 Demand with Shorter Lead Times

Source: Davit Kirakosyan

Barclays Analysts Express Concerns Over Apple’s iPhone 16 Demand

Barclays analysts recently highlighted concerns over the muted demand for Apple’s iPhone 16, based on various indicators observed during the first week of pre-orders. This analysis provides insights into the factors influencing consumer interest in the latest iPhone models and their implications for Apple’s performance in key markets.

Shorter Lead Times and Weaker Channel Checks

The analysts noted shorter lead times and weaker channel checks for both the Pro and base models of the iPhone 16 compared to the previous year’s iPhone 15 launch. This suggests a potential slowdown in demand for the new devices. In particular, wait times in key regions like the U.S. and China have decreased significantly, indicating subdued consumer interest in the latest iPhone models.

Regional Demand Disparities

In the U.S., the wait time for the iPhone 16 Pro Max was 26 days during the first week of pre-orders, down from 41 days for the iPhone 15 Pro Max last year. Similarly, the lead time for the iPhone 16 Pro decreased to 18 days from 25 days for its predecessor. These shorter lead times signal a potential lack of strong demand for the premium iPhone models in the U.S. market.

In China, a crucial market for Apple, demand for the iPhone 16 Pro Max also showed a decline, with the wait time dropping to 18 days from 36 days for the iPhone 15 Pro Max. Barclays interprets these reduced lead times as an indication of weaker-than-expected demand in both the U.S. and China, where consumer spending has softened, impacting the uptake of the new iPhone models.

Global Pre-order Volumes and Apple Intelligence Roll-out

According to Barclays’ supply chain sources, global pre-order volumes for the iPhone 16 are estimated to be down by a mid-teens percentage compared to the previous year. This decline in pre-order volumes reflects the subdued interest in the latest iPhone models worldwide.

Moreover, the delayed roll-out of Apple Intelligence, a key feature of the iPhone 16, in markets like China and parts of Europe until 2025 has further dampened enthusiasm for the new device. This delay in deploying a significant feature could impact consumer perception and purchase intent for the iPhone 16.

Barclays’ Assessment and Future Outlook

While the early launch of the iPhone 16 provides Apple with two extra days of sales in the September quarter, Barclays believes that this incremental revenue may not be sufficient to offset the weaker demand trends observed for the new models. In light of these challenges, Barclays maintains its Underweight rating and $186 price target on Apple, suggesting that subdued demand for the iPhone 16 may persist unless there is a considerable improvement in sell-through rates in the coming months.

In conclusion, Barclays’ analysis underscores the importance of monitoring consumer demand patterns and market dynamics to gauge the success of Apple’s product launches. The concerns raised by the analysts regarding the iPhone 16 demand highlight the need for strategic adjustments and marketing initiatives to stimulate interest in Apple’s latest offerings and drive sales growth in key regions.

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