Apple’s New AI-Driven iPhone: What Investors Need to Know
Apple (NASDAQ:AAPL) has unveiled its new AI-driven iPhone, which is expected to boost the tech giant’s growth. However, it might be wise to temper expectations. This insight comes from Barclays analyst Tim Long, who reviewed the initial iPhone shipment data from China.
Initial Pre-Order Data
Early pre-order data from China indicates a softer start to the iPhone 16 cycle. This is attributed to weakening consumer spend, macroeconomic pressure, and rising competition. The roll-out of Apple Intelligence in Chinese language isn’t expected until 2025, which may dampen early enthusiasm for the iPhone 16.
Long’s analysis, based on discussions with industry insiders and pre-order numbers from major Chinese e-commerce platforms, shows a year-over-year decline in overall pre-orders during the first few days. Notably, orders for pro models have dropped by double digits year-over-year, while base and plus models have seen year-over-year growth.
Price Discounts and Delivery Times
To drive demand for the iPhone 15, Apple had to offer significant price discounts of around 20%. Additionally, delivery times for pro models were shorter compared to last year. According to Long, better production yield and lower demand for pro models contributed to these shorter delivery times.
Sell-Through Data and Future Estimates
Apple typically adjusts its initial orders in early October based on sell-through data points. The earlier iPhone launch adds two extra days of sell-through to the September quarter, but this factor is already accounted for. Long estimates that September quarter iPhone shipments will be around 51 million units due to the additional selling days. However, December quarter builds might be at risk if sell-throughs disappoint.
Investment Outlook
For investors, Long’s verdict is that AAPL remains an Underweight (i.e., Sell) with a $186 price target, suggesting the shares will lose 14% of their value over the next year. In contrast, other analysts have a more optimistic outlook. The consensus rating is Moderate Buy, with an average price target of $249.46, indicating a potential 15% increase in shares over the next 12 months.
In conclusion, while Apple’s new AI-driven iPhone is a significant development, investors should consider the mixed pre-order trends and varying analyst opinions when making investment decisions.
