(Bloomberg) — Apple Inc. (AAPL) shares fell Monday after a closely watched analyst warned that demand for the firm’s new iPhone 16 Pro models has been weaker than expected.
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TF International Securities analyst Ming-Chi Kuo wrote in a report that pre-order sales that began Friday have sold an estimated 37 million units. Kuo says this is down about 13% from last year's iPhone 15 launch and is the result of lower-than-expected interest in the iPhone 16 Pro models.
“A major reason for the lower-than-expected demand for the iPhone 16 Pro series is that the key selling point, Apple Intelligence, is not available at launch with the iPhone 16 release,” Kuo said in the report.
After a weak start to the year, the company's shares have surged over the past four months as investors bet that Apple's AI features would boost sales of its latest iPhones. They fell about 3% in early trading on Monday, leaving their gain this year at about 12%, lagging the 15% gain in the Nasdaq 100 index.
Analysts were disappointed after the company's launch event last week as most of the hardware announcements had already leaked. Looking ahead of the launch event, Morgan Stanley's Eric Woodring said last week that attention will turn to “early iPhone 16 pre-order and lead time data that we will begin collecting this Friday.”
The weakness in demand for the iPhone 16 is not a good sign, “especially because we're soon going to be entering the holiday selling season,” said Matthew Maley, chief market strategist at Miller Tabak + Co. The risk of a “significant decline” in shares has “materially increased.”
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