iPhone 16 Series May Face the Fastest Production Cut in Years, Barclays Maintains "Underweight" Rating on Apple (AAPL.US)
Barclays maintains an "underweight" rating on Apple (AAPL.US) and a price target of $186, citing weak demand for the iPhone 16 series.Apple may have cut iPhone 16 production by 3mn units in the quarter ending December, according to a supply chain check by Barclays.Analysts Tim Long and George Wang at Barclays said in a report on Tuesday: "Based on our recent supply chain channel checks, we believe Apple may have cut production of key semiconductor components for the iPhone by ~3mn units in Q4, which would be the earliest production cut in recent years if confirmed."Barclays said that the shortened global delivery time for the iPhone 16 had been discussed previously, and both cases indicated weak demand for the iPhone 16.Apple's smart features will be rolled out in the US in mid-October with the update to iOS 18.1. However, the Chinese version will not be launched until 2025, and the entry into the European market seems to be delayed to 2025, according to Barclays."We expect pre-orders to be ~51mn units, which is the best case scenario, assuming some channels match or beat last year's pre-orders with more selling days," Long said.He added: "However, if sales continue to disappoint, Q4 sales seem to be at increasing risk due to the staggered rollout of Apple's smart, limited AI adoption outside the US, and lack of hardware differentiation, with recent order cuts."Despite signs that demand for the iPhone 16 is weaker than previous models at this point in the cycle, other analysts pointed out that demand for the high-end Pro and Pro Max models has remained stable.Several analysts also predicted that demand for the iPhone 16 would pick up after the update in mid-October, which remains to be seen.