With demand for Apple’s iPhone declining, how will Tim Cook and his team attract more customers to its offerings? Data from analysts CIRP suggests that the demand for the iPhone—specifically the current iPhone 15 model—is lower compared to the iPhone 14 in this quarter. This shows the pattern of lower demand seen in Q1 2024.
While there are talks about an AI boom when the company launches its gen AI-capable iPhones, these talks are yet to reflect in the supply chain. Two big component manufacturers in the supply chain aren’t expecting growth because of the increased orders.
Analyst Ming-Chi Kuo reports on earnings calls from TSMC and Largan, and their forecasts for the coming year are similar to last year. "My understanding is that some suppliers have seen an increase in iPhone 16 orders for 2H24, but from the EMS/assembly perspective, the iPhone 16 orders for 2H24 have not seen much change (about 87 million units), still slightly lower than the 2H23 iPhone 15 orders (about 91 million units)."
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Apple Hopes To Turn Around Its Sales
With Apple being the biggest player in the market, any increased order to cover the upcoming iPhone 16 family positively impacts their projections. As it stands, it’s the same story as 2023; solid sales but nothing compared to unlocking an an untapped market thanks to artificial intelligence.
The report also shows one way the company is planning to boost sales. But it’s a gamble that asks for patience from the smartphone market.
The company will be trying to capitalize on one key factor in the iPhone 15 family, which is already accelerating Android sales. Generative AI has transformed the view of what a smartphone can offer consumers, from editing photos and videos, through summarising and analysis of images, to assisting creativity.
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Will AI Help Apple Boost iPhone Demand?
Following the announcement of the company’s AI plans at WWDC 2024, Apple’s shares went up by seven percent, mainly on the promise of increased iPhone sales. Because of the high demands generative AI places on hardware and Apple’s push to process as much user data on the user’s device as possible, Apple Intelligence will run on one existing iPhone model—the iPhone 15 Pro Max.
Consumers who do not have the most expensive iPhone out there will be required to buy the latest iPhone hardware to access the A18 Pro chip specifically made to run gen AI tasks.
Yet the AI that will embrace the iPhone won’t be available until the first quarter of 2025. Tim Cook and his team will be asking the fans to buy the smartphone on the promise of receiving the AI at some point in the coming days.