Apple Faces Potential Setback in December Quarter for iPhone 16 Shipments as Production Cuts Loom

Apple’s iPhone 16 and iPhone 16 Pro models, which launched last year, have been predicted to perform well in sales. Speculation has pointed to a positive trend, driven in part by Apple’s new Intelligence features. However, new reports suggest that production of the iPhone 16 could face significant cuts later this year, creating potential challenges for the company.

Barclays analysts have shared investor notes, revealing that Apple may reduce iPhone 16 production by approximately three million units. The reduction, involving a critical semiconductor component, stems from supply chain checks (via 9to5mac).

Barclays’ analysis suggests that iPhone 16 shipments will decline by 15% year-over-year. However, the performance in the previous quarter is expected to align with earlier projections. For the September quarter, iPhone 16 shipments are forecasted to reach 51 million units, with two additional days of sell-through compared to iPhone 15 models.

Risks for the December Quarter and Design Concerns

The iPhone 16 shipments face increased uncertainty for the October, November, and December period. Apple’s decision to reduce production orders places the December quarter at risk. A key factor behind this decline may be the lackluster rollout of Apple Intelligence.

Expected to launch later this month, possibly on the 15th, Apple Intelligence has faced a slow and fragmented release. Some users may be hesitant to upgrade until more stable updates arrive. Furthermore, global adoption of Apple Intelligence has been limited outside the U.S., potentially causing international shipments to remain low.

Another challenge is the lack of significant design innovation. The iPhone 16 Pro models closely resemble last year’s iPhone 15 Pro, offering little incentive for users to upgrade. These factors contribute to the potential difficulties Apple may face in sustaining momentum for its iPhone 16 lineup.