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Apple's iPhone shipments could fall by 15% due to a variety of problems, including the iPhone itself. According to analyst Ming-Chi Kuo, 16 is not a compelling update.
Reports say Apple has already begun adjusting iPhone shipments this year, but one analyst believes Apple will face a significant drop in production and sales throughout the year.
In a post on Medium, TF Securities analyst Ming-Chi Kuo's supply chain research shows that Apple has cut its supply of key semiconductor components to about 200 million. This appears to equate to a 15% year-on-year decline and is the “largest decline” among major phone makers in 2024.
Shipments of the iPhone 15 and iPhone 16 models later this year are expected to decline 10% year over year and 15% year over year in the first and second half of 2024.
iPhone “faces structural challenges that will lead to significant supply declines,” Kuo said, “including the emergence of a new paradigm in high-end mobile phone design and a continued decline in shipments to the Chinese market.”
This new paradigm is expected to come with the iPhone 17 rather than the iPhone 16. This includes bringing AI capabilities to smartphones, as well as market demand for foldable devices, which may not exist even then. .
Meanwhile, the decline in the Chinese market is due to the return of Huawei and the growing popularity of foldable devices among high-end users. Apple's weekly shipments to China are apparently down 30% to 40% year over year.
The analyst also expects Apple won't release new models with “significant design changes” and a strong focus on developing artificial intelligence applications “until 2025 at the earliest.” Until then, he warns, it is “likely to be detrimental to Apple's iPhone shipment rates and ecosystem growth.”
Kuo predicted iPhone sales would fall for five years in a row, but that didn't always happen. This is the largest drop to date compared to last year.