Key points:

  • Actual demand for new models turned out to be lower than analysts and Apple had expected.
  • The absence of the highly anticipated Apple Intelligence AI feature at launch became one of the main factors for the decline in demand.
  • Lower demand for the iPhone 16 Pro negatively impacted the shares of chipmakers such as Nvidia, Broadcom, and Micron Technology.

The market responded with a nearly 3% drop in Apple‘s stock price on Monday. Experts link this to information about delivery times for the new iPhone 16 Pro models. In their opinion, these timelines indicate that demand for the new devices is lower than expected. A likely reason for this could be the delay in implementing key artificial intelligence features.

Demand for the new iPhone 16 fell short of expectations

Last week, Apple introduced the new iPhone 16 series, built on its proprietary Apple Intelligence AI platform. According to pre-order data provided by BofA Global Research, the delivery times for iPhone 16 Pro models worldwide have shortened compared to the same 15 Pro models from last year.

Just three days after pre-orders began, the average wait time for the iPhone 16 Pro was 14 days, compared to 24 days for the iPhone 15 Pro last year. A similar trend is seen with the iPhone 16 Pro Max: the average delivery time has decreased from 32 days last year to 19 days this year.

Concerns about declining demand for consumer electronics negatively impacted chipmaker stocks. Market leaders such as Nvidia, Broadcom, and Micron Technology saw significant drops in their stock prices, leading to a decrease in the Philadelphia SE Semiconductor index. At the same time, the tech sector as a whole saw declines. The S&P 500 Technology Index, which had previously shown steady growth, ended the session with a negative trend.

Despite this, the Dow Jones Industrial Average and the S&P 500 showed moderate gains, while the Nasdaq Composite index closed lower.

AI’s role in the demand decline

As noted in a blog by renowned Taiwanese analyst Ming-Chi Kuo of TF International Securities, one of the key factors for the declining demand for the iPhone 16 Pro series is the absence of the long-awaited Apple Intelligence feature at launch. In his view, the lack of this key feature, which is expected to be available in beta for English-speaking users in the U.S. next month and for other languages only at the end of next year, could prompt potential buyers to postpone upgrading until the next series.

Supporting this assumption are pre-order sales figures published by Jefferies. According to this data, sales of the iPhone 16 Pro and Pro Max models during the first weekend dropped by 27% and 16%, respectively. The decline in demand is particularly noticeable in the U.S., where sales were significantly lower than last year’s figures.