Initial Feedback for the iPhone 16 Mixed: KeyBanc’s Insights

A recent report from KeyBanc Capital Markets indicates that the early feedback regarding Apple’s iPhone 16 reflects demand that is “not great, but not terrible either.”

There were initial concerns about a significant decline in pre-orders compared to last year, with reports suggesting a drop in double digits. However, KeyBanc noted that the demand has not been as poor as some had anticipated.

Factors contributing to the modest demand include a perceived lack of compelling features within the Apple ecosystem and insufficient language support in key markets, particularly in China.

Despite this lukewarm reception, supply chain partners have not yet lowered their production forecasts, with current plans set at 89 million units—an increase of 2% year-over-year for the latter half of 2024. This suggests that, while enthusiasm may be tepid, Apple is maintaining its production expectations.

Additionally, KeyBanc’s September carrier survey revealed mixed results, indicating that the feedback surrounding the iPhone 16 launch has been “slightly disappointing.”

On a positive note, spending data from Apple Stores shows a 15% increase year-over-year during the first ten days post-launch, along with a 7% year-over-year rise over the launch weekend, indicating some positive movement despite earlier concerns.

Moreover, shorter lead times for the iPhone 16 are attributed to improved manufacturing yields rather than weak demand, according to the report.

In summary, while the outlook for the iPhone 16 is not overwhelmingly encouraging, information from the supply chain suggests that the situation is not critical. As indicated by KeyBanc, the initial response to the iPhone 16 is one of moderate caution.