iPhone 16 Starts Slow: Consumers Prefer Older Models

iPhone 16 Starts Slow: Consumers Prefer Older ModelsApple's newly released iPhone 16 series seems to be facing a sluggish start. Early sales data indicates that consumers are showing a stronger interest in last year's iPhone 15 series than the latest upgrades

iPhone 16 Starts Slow: Consumers Prefer Older Models

Apple's newly released iPhone 16 series seems to be facing a sluggish start. Early sales data indicates that consumers are showing a stronger interest in last year's iPhone 15 series than the latest upgrades. Unlike previous years, this year's launch coincided with pre-pandemic release schedules, allowing for direct year-over-year comparisons.

Multiple reports point to the iPhone 16's underwhelming initial sales compared to the iPhone 15 series last year. A report by Consumer Intelligence Research Partners (CIRP) reveals that the iPhone 16 series accounted for only 20% of US market sales in its first two weeks, significantly lower than the iPhone 15 series' 29% share during the same period last year. This data highlights a notable decline in early adoption rates for the new iPhone.

This trend is even more apparent in the high-end segment. The iPhone 16 Pro and Pro Max accounted for only 12% of September sales, lagging behind last year's iPhone 15 Pro and Pro Max, which held a 15% share. Considering that Apple sells both new and older models simultaneously, the shift in consumer preference towards last year's models is particularly striking.

The continued presence of older models in the market further corroborates this trend. In September 2023, iPhone 13 and older models accounted for approximately 26% of US sales, while this year, the proportion stands at 24%, suggesting a relatively stable preference for older devices.

In contrast, consumers demonstrated a clear inclination towards purchasing last year's iPhone 15 series this year. During the September 2023 quarter, the iPhone 15 series captured 56% of sales, significantly exceeding the iPhone 14 series' 46% share in the same period last year. The 10% increase in demand for older models indicates consumers' reluctance to immediately upgrade to the latest version.

Analysts have noted that Apple has adjusted its production strategies to accommodate this change. A JPMorgan report indicates that while demand for the iPhone 16 series is steady, supply and shipping times are slightly behind those of the iPhone 15 series. Notably, iPhone 16 Pro Max shipping times in the US have shortened from 21 days last year to 15 days this year, suggesting Apple is actively managing its high-end model supply.

Meanwhile, analyst Ming-Chi Kuo observed that demand for the iPhone 16 Pro model meets expectations, even prompting Apple to keep production running during the National Day holiday to fulfill orders. However, demand for the iPhone 16 and 16 Plus has been relatively sluggish, causing Apple to cautiously cut orders for certain components for these models by approximately 3% to 5%.

While the production cut reflects the weaker demand for the non-Pro models, it's unlikely to significantly impact overall production levels, as Apple maintains steady output for the high-demand Pro models. As the holiday season approaches, Apple could see renewed interest in the iPhone 16 Pro models, potentially leading to a reassessment of the positioning and appeal of the standard iPhone 16 and 16 Plus, setting new directions for future product cycles.