At the beginning of this month, an analyst working for Barclays said that there was nothing special about the iPhone 16 series that would help reverse declining demand for the iPhone. As a result, the analyst cut his rating on Apple to “Underweight” and in a research note Barclays told clients “…we see no features or upgrades that are likely to make the iPhone 16 more compelling.”
Now that the month is almost done, TF International analyst Ming-Chi Kuo is throwing in his 2 cents and he agrees with Barclays. In a blog post, Kuo writes, “It is expected that Apple will not launch new iPhone models with significant design changes and the more comprehensive/differentiated GenAI ecosystem/applications until 2025 at the earliest. Until then, it will likely harm Apple’s iPhone shipment momentum and ecosystem growth.”
Apple may not go all out on AI for the iPhone until 2025’s iPhone 17 line is released
Even though the word is that iOS 18 will add AI features, if Kuo is right (and he is quite often), it won’t be until the iPhone 17 line is released in 2025 that we will see Apple going full AI with the iPhone. And the next couple of years will not be good ones for the iPhone according to Kuo. Already Kuo sees a 15% decline in “shipments of key upstream semiconductor components” indicating a decline to 200 million iPhone 15 deliveries. Kuo writes, “Apple may have the most significant decline among the major global mobile phone brands in 2024.”
Samsung promotes GalaxyAI on the Galaxy S24 Ultra
Kuo says that he sees shipments of the iPhone 15 line declining by 10%-15% in the first half of this year. He also forecasts the same decline for the iPhone 16 series (compared with the iPhone 15 line) during the second half of this year. Part of the problem will be the competition. Kuo writes that the issues include “the emergence of a new paradigm in high-end mobile phone design and the continued decline in shipments in the Chinese market.”
The new high-end mobile phone design paradigm includes the use of AI (GenAI) and foldable phones. Apple does not yet have a foldable device although there are always rumors that the company is working on such a device. The iPhone sales decline in China that Kuo forecasts is due to Huawei’s comeback and “the increasing preference for foldable phones among high-end users as their first choice for phone replacement” in the world’s largest smartphone market.
Kuo paints a bleak picture of iPhone demand for the next couple of years
To show how AI is becoming increasingly important to the smartphone industry, Kuo notes that the addition of GenAI features to the Galaxy S24 line has led Samsung to revise upward by 5% its forecast shipments for the manufacturer’s 2024 flagship series. The analyst compares this with Apple’s downward revision of iPhone 15 series shipments for the first half of this year. Kuo paints a bleak picture of iPhone demand at least until 2025.
This year, we should see larger screens for the iPhone 16 Pro (6.3-inch) and the iPhone 16 Pro Max (6.9-inches). The iPhone 16 Pro will add the Tetraprism periscope camera to deliver 5x optical zoom along with the iPhone 16 Pro Max. The iPhone 16 and iPhone 16 Plus could be powered by the 3nm A18 Bionic chipset, and the iPhone 16 Pro models should be equipped with the A18 Pro application processor.
Additionally, the iPhone 16 non-Pro units are expected to join the Pro models and contain 8GB of RAM. The iPhone 16 and iPhone 16 Plus are also rumored to get a hike to Wi-Fi 6E from Wi-Fi 6 while the iPhone 16 Pro and iPhone 16 Pro Maxare upgraded to the new Wi-Fi 7 from Wi-Fi 6E. And all four 2024 iPhone models will have the new Capture button which reportedly will be used by iPhone 16 series users to help them start recording videos with the phone. One theory is that this button is being added to help users take spatial videos to be viewed in 3D while wearing the Vision Pro headset.
