Analyst Ming-Chi Kuo predicts Apple’s iPhone 16 is set to face a significant challenge with a 15% shipment drop in 2024. Kuo’s insights reveal the anticipated decline, attributing it to structural challenges, including the emergence of a new paradigm in high-end mobile phone design and continued shipment decreases in the Chinese market. Apple’s iPhone 16 lineup, expected later this year, may lack the anticipated design changes and comprehensive GenAI features, potentially impacting the company’s shipment momentum until 2025.
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Understanding the Decline
Ming-Chi Kuo, a well-known Apple analyst, has shared some insights that suggest Apple might face a tough year in 2024. His recent survey of Apple’s supply chain indicates that the company might see a 15% decrease in the shipment of its iPhones compared to the previous year. This decline is influenced by various factors, including a slower demand for iPhones in China.
“iPhone 15 series and new iPhone 16 series shipments will decline by 10–15% YoY in 1H24 and 2H24, respectively.”
Kuo
Kuo expects fewer iPhones to be shipped in the first and second halves of 2024 compared to the previous year. The main reasons behind this, as explained by Kuo, are the changes in the design of high-end phones and a decrease in iPhone sales in China.
Looking at the iPhone 16
Looking ahead to the iPhone 16 lineup set to launch later this year, Kuo expresses a cautious viewpoint. He believes that Apple might not introduce significant design changes or advanced AI features until at least 2025. This could potentially affect how many iPhones Apple sells and its overall growth.
It is expected that Apple will not launch new iPhone models with significant design changes and the more comprehensive/differentiated GenAI ecosystem/applications until 2025 at the earliest.
Kuo
Kuo suggests that Apple might not bring out iPhones with exciting new designs or enhanced AI features until a few years from now, which might impact how many people buy iPhones.
Different Perspectives
Despite Kuo’s warnings, there are differing opinions. Some people find Kuo’s predictions a bit dramatic. They believe that the absence of more advanced AI applications may not necessarily harm Apple’s iPhone sales and growth. Other sources have even suggested that the upcoming iPhone 16 lineup will have notable changes, such as a new capture button and larger screens.
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However, another analyst from Barclays agrees with Kuo. They believe that there’s nothing special about the iPhone 16 series that would make people rush to buy it. This led to a downgrade of Apple’s rating, indicating that the iPhone 16 might not be as compelling as Apple would hope.
The Challenge of Change
Kuo sheds light on the challenges Apple faces in a rapidly evolving smartphone market. The increasing demand for phones with advanced AI (GenAI) and the rising popularity of foldable phones in China present obstacles for Apple. Kuo predicts a decline in iPhone sales in China due to the comeback of Huawei and the preference for foldable phones among high-end users.
To highlight the growing importance of AI in smartphones, Kuo points out Samsung’s positive response to adding GenAI features to the Galaxy S24 line. Samsung increased its shipment forecast, while Apple reduced its forecast for iPhone 15 series shipments. Kuo paints a less optimistic picture for iPhone demand until at least 2025.
What’s Coming with iPhone 16
Despite the concerns, there are expectations for the iPhone 16 Pro and Pro Max models to feature larger screens, a Tetraprism periscope camera for 5x optical zoom, and the advanced 3nm A18 Bionic chipset. On the other hand, the non-Pro models might get an upgrade to Wi-Fi 6E and a new Capture button for easier video recording, possibly for 3D videos when using the Vision Pro headset.
Even with these potential improvements, Kuo’s warnings persist. He anticipates a 10%-15% decline in shipments for both the iPhone 15 and iPhone 16 series, with the iPhone 16 models expected to ship in the second half of 2024. The absence of significant design changes, coupled with fierce competition and changing preferences in the Chinese market, contributes to the challenging landscape Apple faces in 2024.
Ming-Chi Kuo’s cautionary predictions regarding Apple’s iPhone 16 shipments in 2024 highlight the complex challenges the tech giant is navigating. The evolving landscape of high-end mobile phone design, the surge in demand for AI features, and the competition from rivals present hurdles that Apple must strategically address to maintain its market position and momentum in the coming years. The future of the iPhone, as Kuo suggests, hinges on how well Apple adapts to these changing dynamics.
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