iPhone 16 won't be compelling and Apple will get hurt because of it, says Kuo

Reports have proposed that Apple has already started to adjust its iPhone shipments for the year, but in the view of one analyst, Apple will see a hefty drop in what it produces and shifts across the year.

In a Medium post by TF Securities analyst Ming-Chi Kuo, supply chain surveys indicates Apple has lowered its shipments of key semiconductor components down to around 200 million. This apparently equates to a 15% year-on-year decline, and the "most significant decline" among major phone makers in 2024.

Shipments of iPhone 15 models and the iPhone 16 later in the year will allegedly go down by 10% year-on-year and 15% year-on-year for the first and second halves of 2024.

The iPhone "faces structural challenges that will lead to a significant decline in shipments," Kuo reckons, "including the emergency of a new paradigm in high-end mobile phone design and the continued decline in shipments in the Chinese market."

This new paradigm is allegedly coming to the iPhone 17, not the iPhone 16. This includes catering for AI-driven experiences on smartphones, as well as a market demand for foldable devices which may not be coming even then.

Meanwhile, the Chinese market decline is credited to Huawei's return and the rise of foldable devices among high-end users. Apple's weekly China shipments have apparently declined between 30% and 40% year-on-year.

The analyst also expects that Apple won't be launching new models with "significant design changes" and a heavy lean towards designing for AI applications "until 2025 at the earliest." He warns that, until then, it will "likely harm Apple's iPhone shipment momentum and ecosystem growth."

Kuo has predicted iPhone sales drops for five consecutive years, which have not always happened. This appears to the largest drop year-over-year to date.