Updated July 19 with details on reduced orders in the iPhone 16 supply chain.
CUPERTINO, CALIFORNIA – JUNE 10: (L-R) Apple CEO Tim Cook, Apple’s senior vice president of Machine Learning … [+]
As demand for Apple’s iPhone slows, how will Tim Cook and his team attract consumers to its ecosystem? CIRP Analyst Data The data shows that demand for the iPhone, especially the current iPhone 15 model, is lower than that of the iPhone 14 in this quarter. This echoes the trend of declining demand observed in the first quarter of 2024.
Updated: Friday, July 19: While there is talk of an AI boom when Apple launches its iPhones, these rumors are not yet reflected in the supply chain. Two major component manufacturers in the supply chain do not expect growth due to increased orders.
Analyst Ming-Chi Kuo reports on TSMC and Largan’s earnings conference calls, and their guidance for the coming year is similar to last year’s.
“My understanding is that some suppliers have seen an increase in iPhone 16 orders for the second half of 2024, but from an EMS/assembly perspective, iPhone 16 orders for the second half of 2024 have not changed much (~87 million units), still slightly lower than iPhone 15 orders for the second half of 2023 (~91 million units).”
With Apple being the largest player in this market, any increase in orders to cover the upcoming iPhone 16 family would have a positive impact on their projections. As things stand, it’s the same story as in 2023: solid sales but far from opening up an untapped market thanks to AI.
Attendees look at the all-new Apple iPhone 15 during an Apple event on September 12, 2023 (Photo … [+]
The report also highlights one way Apple hopes to turn around its sales. But it’s a gamble that requires patience in a volatile smartphone market.
Apple will focus on a key element of the iPhone 15 lineup that is already accelerating Android sales. Generative AI has transformed the way consumers view what a smartphone can do, from editing photos and videos to synthesizing and analyzing text and images to aiding creativity.
Following Apple’s announcement of AI plans at the Worldwide Developer Conference in June, The company’s shares rose seven percentprimarily on the promise of increased iPhone sales. Due to the high demands that generative AI places on hardware and Apple’s desire to process as much user data as possible on the user’s device, Apple Intelligence will only work on one existing iPhone model: the iPhone 15 Pro Max.
Consumers who don’t own the most expensive iPhone on the market will have to buy the latest iPhone hardware to access the A18 Pro chip that’s specifically designed to support generative AI routines.
Yet the AI that the iPhone is clearly lacking right now won’t be available until the first quarter of 2025. Tim Cook and his team will be asking Apple loyalists to buy the smartphone with the promise of receiving AI at some point in the future.
In the meantime, all of these benefits are available on Android, and have been since Google introduced the idea of an AI-powered smartphone in October 2024 with the launch of the Pixel 8. With Google’s Pixel 9 family set to be announced in August, Apple’s iPhone will be two generations behind Android’s AI efforts before it even leaves the Cupertino stage.
Will consumers be content to wait for Apple to catch up, or will they decide that the AI revolution can’t wait? If it’s the former, Apple’s decision to “shut down” should help revitalize iPhone sales. But if it’s the latter, the Android ecosystem may have just found Tim Cook’s Achilles heel.
Now find out more about Apple’s iPhone 16 and iPhone 16 Pro launch plans…