Kuo: Expectation That Apple Intelligence Will Drive iPhone 16 Sales 'May Be Too Optimistic'
Apple does not appear to have increased iPhone 16 orders despite reports to the contrary, according to Apple analyst Ming-Chi Kuo. Kuo cites recent earnings reports from Apple suppliers TSMC and Largan as evidence.
TSMC recently said that it did not see an increase in unit growth, while Largan said that orders for high-end models in 2024 are similar to last year. Kuo believes that Apple's iPhone 16 orders for the second half of 2024 are around 87 million units, which is lower than the 91 million iPhone 15 units that Apple ordered in 2023.
Kuo said that certain suppliers may have been asked to increase production, but that may be related to "specific reasons within individual industries or components."
He suggests that expectations that Apple Intelligence will drive iPhone 16 sales "may be too optimistic" as the feature is available in U.S. English only.
The launch of Apple Intelligence is generally considered to be the reason for the increase in iPhone 16 orders. However, Apple Intelligence will only be available in Beta for US users in 2H24, and Apple Intelligence Siri only supports English. Regardless of whether Apple Intelligence alone can drive replacement demand (which is another big topic), the expectation that consumers will buy the new iPhone 16 for the Beta version of Apple Intelligence in 2H24 may be too optimistic.
Earlier this month, Bloomberg suggested that Apple was counting on the iOS 18 AI features to boost iPhone shipments by 10 percent in 2024. Apple Intelligence requires an iPhone 15 Pro or later, so customers with an older iPhone will need to upgrade to the iPhone 16 to get the technology.
Apple Intelligence includes a long list of new capabilities, including Writing Tools for proofreading, polishing, and summarizing text, Image Playground for generating images, and Genmoji for creating custom emoji. Apple Intelligence will also be used to overhaul Siri, but the new Siri functionality isn't slated to launch until 2025.
So far, Apple has not established an AI deal for Chinese consumers, and Apple Intelligence will also not be coming to the European Union when iOS 18 launches.
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