Apple Slashes iPhone 16 Orders Amid Weak Demand, Analyst Reports

On Wednesday, Apple's stock price fell by 2.16%, which may be related to two pieces of bad news: first, the well-known Apple supply chain analyst Ming-Chi Kuo revealed that Apple's iPhone 16 has been cut; second, sources revealed that Apple has significantly reduced the production of Vision Pro in recent months.

Has iPhone 16 Orders Been Cut By About 10 Million Units?

According to Kuo, Apple has reduced orders for the iPhone 16 by about 10 million units for the fourth quarter of this year and the first half of 2025.

Kuo revealed that most of the order cuts affect the standard iPhone 16, not the iPhone 16 Pro - the latter has a higher hardware configuration and is more popular with consumers.

Kuo wrote in the article: As a result, iPhone 16 production for 2H24 is now estimated at 84 million units.

Kuo currently estimates that Apple will produce a total of 80 million iPhones in the fourth quarter, lower than the approximately 84 million units in the same period last year. He expects the total iPhone production volume for the first quarter of 2025 to be 45 million units, and 39 million units for the second quarter, lower than the 48 million and 41 million units this year.

Kuo said: iPhone revenues are expected to come under pressure in 1H25 due to a YoY shipment decline and a less favorable product mix due to the launch of SE4.

He estimates that Apple's iPhone SE4 will begin mass production in December this year, with a production volume of about 8.6 million units from December this year to the first quarter of next year. Apple's iPhone SE is usually the most affordable in its product line, but it is not updated every year.

Kuo said: I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service. However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development

Apple Intelligence is expected to be launched as a test feature in the iOS 18.1 update next week for new users to try. The latest iPhone 16 and last year's iPhone 15 models both support the feature. The first feature is to allow users to summarize text messages and emails, choose automatic reply messages, and so on.

Vision Pro Production Is Also Reduced

According to sources told the media, Apple has significantly reduced the production of its mixed reality headset Vision Pro since the beginning of this summer and may stop producing the current version of the product before the end of the year.

In February of this year, Apple officially launched Vision Pro, hoping to boost consumer demand. However, after the product was released, consumer enthusiasm declined due to its high price and competition from cheaper products like Meta's Quest.

Currently, the starting price of Apple Vision Pro in the United States is about $3,500, while the price of Meta's Quest 3 headphones is only about $500.

According to the media citing employees from three Vision Pro suppliers, upstream suppliers have so far manufactured enough components to produce 500,000 to 600,000 Vision Pro devices. One employee revealed that their factory had already suspended production of Vision Pro components in May.

The report cited an employee as saying that Apple also told equipment assembler Luxshare Precision in recent weeks that it may need to stop production in November.

In June this year, it was reported that Apple is working on releasing a more affordable and less functional vision product before the end of 2025, and has suspended the development of the next generation of high-end Vision headsets.