iPhone 16 resale prices ‘crashed in first three hours of trading’, by Investing.com

Investing.com — iPhone 16 resale prices on Sept. 20, the first day of shipping, “tumbled in the first three hours of trading,” Jefferies revealed in a note.

Around 1:30 p.m., dealers in the Mongkok area stopped buying iPhone 16 models, except for the Pro Max model in Desert color with 256GB of storage, the investment bank said.

The data contrasts sharply with the iPhone 15’s performance last year, where the 15 Pro Max was still trading at a 3%-34% premium four days after shipments began.

“This supports our cautious view on China’s demand,” Jefferies analysts wrote.

They explain that Apple Inc’s (NASDAQ: ) new iPhones are trading the same as stocks in Hong Kong in the first few weeks of delivery, as the city is home to one of the world’s largest smartphone resale markets.

Dealers buy new iPhones from consumers at an extra cost and resell them in markets like China and Russia, where demand often outstrips supply. However, with the launch of the iPhone 16 today, Jefferies notes that it was “one of the worst trading days for a new iPhone”.

After the first hour, the premium iPhone 16 Plus turned negative, which may not be too surprising. For the iPhone 16 Pro Max, all four colors initially opened with a 15% to 24% premium, but within two hours, that margin had narrowed to between 4% and 17%.

“As little as 30 minutes later, most dealers in Mongkok stopped buying any iPhone 16 model except the dessert-colored 16PM and 256GB memory (several hundred HK$ premium),” the analysts added.

While the iPhone 16 Plus appeared to be sold on the official websites in both Hong Kong and China, analysts believe there is still stock available on Chinese platforms, with delivery times in Hong Kong as low as 10 days.

As such, they weren’t surprised to see the premium iPhone 16 Plus shrinking rapidly. However, going from a premium to a discount in just one hour is considerably worse than last year, when it took four days for such a change.

Last year, certain colors and memory configurations, especially the 256GB models, were still trading higher nine days after shipments began. The fact that even the premium Pro Max was gone in three hours this year probably caught the market off guard.

Jefferies attributes the weaker demand to a combination of factors, including the absence of significant hardware innovations and lower trade-in values. It also points out that the iPhone 16 Pro Max offering is less constrained this year, as previous camera performance issues have been resolved.

Looking ahead, the firm believes that the upcoming launch of Apple AI services in the US next month could generate a stronger wave of consumer demand.