Apple Intelligence Will Boost iPhone 16 Sales, Analysts Say

An analysis of early pre-order data by BofA Global Research showed that the average global delivery time for iPhone 16 models was shorter than last year’s lineup, suggesting lower demand. Apple’s supply chain expert Ming-Chi Kuo also said that first-weekend pre-order sales were down about 12.7% compared to first-weekend sales of the iPhone 15 series.

However, analysts are putting little weight on the early numbers and are instead looking to the horizon.

Luria told BI that it places “very little faith” in third-party reports to gauge iPhone 16 demand, calling it “an exercise in futility.”

“It’s like trying to weigh an elephant by a few hairs,” he said.

The analyst compared the potential for Apple Intelligence sales growth to the excitement surrounding 5G coverage for the iPhone 12 about four years ago.

Luria said that when the iPhone 12 launched with 5G, the feature boosted sales by 40 percent from the iPhone 11. According to the analyst, the difference now is that Apple Intelligence will not come out of the box.

Luria added that for Apple to do well this year, the company needs to increase sales by 10%, which doesn’t have to happen overnight.

Wedbush Securities analyst Dan Ives wrote in a note that Apple is gearing up for an “AI-driven iPhone supercycle” that could push the Cupertino-based company into $4 trillion market cap territory.

“Based on all our recent checks of the Asian supply chain, this iPhone 16 upgrade cycle will be over 90 million units at initial launch and will increase by approximately 8 million to 10 million units from the iPhone 15 and so far demand is well-tracked globally,” Ives wrote. . “With our estimates of 300 million iPhones out of 1.5 billion iPhones not updated in 4 years, this has created a golden opportunity for Cupertino to push the iPhone 16 as the start of what we see as a supercycle driven by artificial intelligence”.

An Apple spokesman did not immediately respond to a request for comment.

Customers who lined up outside Apple stores in San Francisco and New York this weekend told BI that Apple Intelligence wasn’t the main draw to upgrade their phones.

Ron Witt, a San Francisco resident, told BI that he’s mainly interested in the new camera, but he’s also curious about the new AI features that will start rolling out in October.

“Excited is not the right word,” he said. “I think I’m more intrigued.”

Luria, the Apple analyst, told BI that Apple Intelligence won’t be a popular feature until people start using it, comparing it to the dominance of AI after ChatGPT is released to the public in 2022.

“This is a new type of functionality and product where until people start using it, they won’t know they need it,” he said.