Apple possibly cuts Q4 iPhone 16 builds by 3M: Barclays

Apple (NASDAQ:AAPL) possibly reduced the number of builds for the iPhone 16 by 3M units for the quarter ending in December, according to a supply chain channel check by Barclays.

“Based on our recent supply chain channel checks, we believe AAPL may just have cut roughly 3M units at a key semiconductor component in iPhones for the Dec-Q, which if confirmed would be the earliest build cut in recent history,” said Barclays analysts Tim Long and George Wang, in a Tuesday note.

Apple Intelligence features will begin rolling out in mid-October in the US with the iOS 18.1 update. However, the Chinese language roll-out will not begin until 2025. Barclays said the introduction of Apple Intelligence into the European market looks to be staggered into 2025 as well.

“We think Sep-Q iPhone units are on track for 51M as the best case, assuming some channel fill in line or better versus last year due to more selling days,” Long said.

“However, Dec-Q looks to be increasingly at risk with the recent order cuts if sell-throughs continue to disappoint, due to staggered roll-out of Apple Intelligence, limited adoption of Al outside of the US and lack of hardware differentiation,” he added.

Barclays maintains its Underweight rating on the Cupertino-based company.

Despite indications of weaker demand for the iPhone 16 compared to prior models at this time in the cycle, other analysts have pointed to steady demand for the higher-end Pro and Pro Max models.

Several analysts have also predicted demand will rise for the iPhone 16 after the update is released in the middle of this month, which remains to be seen.