iPhone 16 Sales Underperform, raising Concerns for Apple
Apple (AAPL) is facing headwinds as sales of its latest flagship, the iPhone 16, fall short of expectations compared to last year’s iPhone 15 cycle. A recent Wave7 Research poll conducted by J.P. Morgan analyst Samik Chatterjee reveals a surprising factor contributing to the slower-then-anticipated sales: low consumer awareness of Apple Intelligence, a feature designed to enhance the user experience.
Despite typical seasonal sales increases in October and November, the iPhone 16 lineup is struggling. The iPhone 16 Pro max is the top performer,accounting for 19% of sales across carriers. The standard iPhone 16 and iPhone 16 Pro follow with 16% and 17% market share respectively. The iPhone 16 Plus, tho, has seen substantially weaker adoption, capturing only 7% of sales.
The J.P. Morgan poll highlights a meaningful knowledge gap regarding Apple Intelligence. A mere 10% of respondents reported “high” awareness of the tool, while a staggering 67% admitted to low awareness. This lack of familiarity, while perhaps a driver for future upgrades, appears to be dampening current excitement and impacting sales.
Adding to the challenges, sales representatives have noted that the iPhone 16 Pro and Pro Max are falling behind Samsung’s Galaxy S24 Ultra in terms of camera quality, a key selling point for many consumers. “Another challenge in competitive positioning,” one sales agent noted, “is the camera quality. The Galaxy S24 Ultra is currently perceived as superior in this area.”
Despite these setbacks,J.P. Morgan maintains an “Overweight” recommendation on Apple shares, expressing confidence in the company’s long-term growth potential. AAPL stock is up 36.8% year-to-date, outperforming broader market indices. This suggests that investors remain optimistic about Apple’s future, even amidst current challenges with the iPhone 16.
The underperformance of the iPhone 16 highlights the importance of effective marketing and consumer education in the competitive smartphone market. Apple’s ability to address these issues and regain momentum will be crucial in maintaining its market leadership.
