Apple cuts iPhone 16 orders at key supplier, Barclays claims

1 month ago 22

In a new investor note seen by 9to5Mac today, analysts at Barclays report that Apple “may have just cut” iPhone 16 production by three million units. Based “recent supply channel checks,” the analysts say that these cuts were made at a “key semiconductor component” for iPhone orders through the December quarter.

Barclays says that its “sell-through checks” suggest a 15% decline year-over-year for the iPhone 16 launch.

For the September quarter, Barclays believes that iPhone shipments are on track for 51 million units, covering the months of July, August, and September. The report notes that the iPhone 16 has two additional days of sell-through this year than the iPhone 15 last year (nine days last year versus 11 days this year).

The December quarter, however, “looks increasingly at risk” for iPhone shipments due to the recent order cuts. Barclays analysts also site the “staggered rollout of Apple Intelligence,” the “limited adoption of AI outside of the US,” and the “lack of hardware differentiation” as reasons for the iPhone 16 demand issues.

We think Sep-Q iPhone units are on track for 51M as the best case (consensus and Barclays both at 51M for Sep-Q estimate), assuming some channel fill in line or better vs. last year due to more selling days. We believe July and August sell-through has been flattish Y/Y.

9to5Mac’s Take

I’m hesitant to put much too much stock into this report from Barclays, primarily because of the emphasis on lead times. Much of the Barclays analysis is based on the fact that “wait times across major geos we tracked were much shorter” for the iPhone 16 compared to the iPhone 15 last year.

I’m of the opinion that order times don’t do a great job of representing iPhone demand. There are so many factors that contribute to these numbers that I don’t think you can use them as a primary reason for iPhone demand being strong or weak in a particular year.

Still, it is notable that Barclays analysis suggests Apple cut three million units at a “key Taiwanese supplier.” Apple will report its fiscal Q4 2024 earnings in early November, followed by its fiscal Q1 2025 earnings in early February.

My favorite iPhone 16 accessories:

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