Apple expects sales of the iPhone 15 line and the upcoming iPhone 16 to decline by 10-15%

In his latest report, renowned analyst Ming-Chi Kuo points to Apple’s disappointing forecast for demand for its iPhone 15 and even iPhone 16 smartphones. According to its analysis of the supply chain for Apple’s smartphone production, the company has reduced orders for key semiconductor components for the iPhone in 2024 to about 200 million units (down 15% from the previous year). Thus, in 2024, Apple may experience the largest decline in sales among global smartphone brands.

The analyst expects shipments of the iPhone 15 series and the new iPhone 16 to decline by 10-15% year-on-year in the first and second quarters of 2024 (compared to shipments of the iPhone 14 line in the first quarter of 2023 and the iPhone 15 in the second quarter of 2023).

The iPhone business is facing structural challenges that will result in a significant decline in shipments in 2024 due to the emergence of a new paradigm for high-end smartphones and further declines in shipments in the Chinese market.

The new paradigm includes the active use of generative AI functions and foldable smartphones. The main reason for the decline in the Chinese market is the return of Huawei, as Chinese buyers prefer a local manufacturer. As a result, Apple’s weekly shipments in China have decreased by 30-40% year-on-year in recent weeks, and this trend is expected to continue. In addition, foldable smartphones are growing in popularity in China among premium buyers, who see them as the first choice to replace their current model.

Ming-Chi Kuo also notes that Samsung has revised its 2024 Galaxy S24 series shipment forecast by 5-10% due to higher-than-expected demand from the integration of generative AI features, while Apple has revised its iPhone 15 shipment forecast for the first half of the year downward.

The analyst expects that Apple will not release new iPhone models with significant design changes and a more comprehensive/differentiated AI ecosystem/applications before 2025. Until then, this is likely to hurt iPhone shipments and the growth of the Apple ecosystem.