According to pre-sale estimates, which indicated a slower-than-expected response to the launch of the highly anticipated Apple iPhone 16, the model sales are to drop by about 12 per cent compared with what was seen last year for the debut of the iPhone 15.  New AI features that have been offered to attract much interest from the market are not convincing consumers to adopt the latest model, as early sales data show this.  Analysts estimate that 37 to 40 million units sold on the first weekend of pre-sales significantly dip into previous years’ sales rates.

Apple had also hoped the iPhone 16 would be the catalyst it needed for the moribund market for new smartphone business after years of minor to no new sales.  It also debuted some AI software it thought consumers would be clamouring for.  So far, however, there is lacklustre demand for the top-of-the-line versions of the iPhone 16 Pro and Pro Max.  Apple analyst Ming-Chi Kuo reports that sales of the pricey models fell 27% and 16%, respectively, from last year.

Contrary to this, however, there was an increase in the pre-sale of the standard iPhone 16 and iPhone 16 Plus compared to the previous year’s launch of the iPhone 15.  Thus, in this shift of market preference toward lower-priced models, Apple’s overall revenues might be affected negatively as the company generally counts on higher sales of premium models to maintain margin due to profit.  Analysts such as CFRA Research’s Angelo Zino warned that the standard iPhone 16 models were “too good”, providing features like camera and processor upgrades like their Pro siblings – which somewhat diminished the incentive for a consumer to drop cash on higher-end models.

It is one of the factors that has slowed the Pro model’s take-up: Apple may have started its rollout of new AI features a little too late, and they will not be present on the devices at launch.  These features, dubbed “Apple Intelligence,” will begin landing next month when iOS 18.1 arrives in beta.  Since delivery times for the iPhone 16 Pro are down to 1-2 weeks, and it was 3-4 weeks for the iPhone 15, things still need to be more rosy than Apple expected.

While the sales thus far this year aren’t off to a flying start, analysts have high expectations for the iPhone 16.  Analysts like Zino think that once all the AI features from Apple are fully rolled out, word-of-mouth may bring in an enormous wave of upgrades.  Canalys analyst Lex Chiew notes that shorter lead times may denote Apple’s supply chain improvements, permitting the company to respond better to demand.  The CEO of T-Mobile, Mike Sievert, has also reported better pre-orders on the iPhone 16 than what was done last year for the iPhone 15.

While pre-sale numbers are softer than forecast, the total story for iPhone 16 is still early.  Apple is likely to shed further insight into its iPhone sales during its quarterly earnings report in the first week of January.  Analysts will be waiting eagerly because the last three months have always been the most significant sales period.  While the start has not been as fast as pundits would have liked, there is still cautious optimism that the momentum of the iPhone 16 will gather steam in the coming months.

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