New analysis predicts iPhone 16 sales will be weak due to few changes from iPhone 15.
We are entering the new year and Barclays released a new research note with its expectations for Apple. Apple’s release schedule for 2024 is very clear and, like every year, the iPhone will be one of the most important devices. This year the iPhone 16 will be launched and analysts understand that sales will be low due to few changes of the new generation compared to the iPhone 15.
The truth is that this sentence is quite intriguing. From the rumors we’ve heard so far, The iPhone 16 aims to be a generation with significant changes. Without going too far, the iPhone 16 Pro and iPhone 16 Pro Max should get bigger and have larger screens.
The iPhone 16 will be presented in September 2024
These are the expectations for Apple that analysts gave Barclays:
- We expect continued iPhone weakness as the iPhone 16 launches. Our controls remain negative on volumes and mix for the iPhone 15, and we don’t see any features or updates that would make the iPhone 16 more attractive.
- We think Macs and iPads need to return to pre-Covid levels. These two products combined were showing virtually no growth pre-Covid, but are still performing 20-30% higher at these levels, even as the rest of the industry has corrected.
- There will be a slowdown in growth in Services, with an increase in regulatory risk. We model ~10% and ~8% growth in services in FY24 and FY25, well below the previous growth estimate of ~20%.
- Long-term diminishing returns in the ecosystem. Apple remains a very strong ecosystem, moving from Mac to iPhone over the past decade. We believe ecosystems are underperforming with new products/services, which will hamper growth in the years to come.
The iPhone 15 showed disappointing performance and we expect the iPhone 16 to perform similarly.
If we trust these predictions, 2024 doesn’t seem like a good year for Apple. This analysis ensures that we will see a decline in iPhone, iPad, Mac sales as well as a decline in services growth, which is otherwise common.
Taking all this into account, Barclays predicts decline in Apple shares. Their reports indicate that the iPhone 15 is not selling well and the iPhone 16 will not change this trend. We will see if the predictions come true.
