The release of the iPhone 16 series was heavily marketed by Apple, with Tim Cook and his team highlighting generative AI as the future. Apple positioned the iPhone 16 as “built from the ground up for Apple Intelligence,” sparking expectations of a "super-cycle" of upgrades from consumers. However, sales for the iPhone 16 Pro have not met expectations, leaving Apple to rely on its smaller, more affordable models.
Early data shows a 12% drop in overall iPhone 16 sales. While Apple's total shipments still reach 37 million units, the iPhone 16 Pro and iPhone 16 Pro Max are underperforming. In contrast, the iPhone 16 and iPhone 16 Plus are maintaining sales figures and preventing a steeper decline.
Apple’s traditional annual update cycle, including both the hardware and iOS 18, hasn’t been enough to drive excitement. While consumers continue to favor predictable annual releases, the iPhone 16 Pro has not captivated the market as intended. The reliance on generative AI as a headline feature poses challenges since many of the promised features are not yet available. The first wave of updates is expected later this month, with full Apple Intelligence functionality delayed until March 2025.
Interestingly, the standard iPhone 16 models have been boosted with higher specs, including the A18 chipset and additional RAM, making them a closer competitor to the Pro models. This shift in design gives more value to the base models, bridging the gap between them and the higher-end iPhone 16 Pro. Consumers looking for a full experience with Apple Intelligence may find the standard iPhone models sufficient, limiting the appeal of the Pro versions.
Looking ahead, Apple’s strategy includes the launch of the next iPhone SE in March 2025. This budget-friendly model will feature a design similar to the iPhone 16, along with the same AI capabilities, thanks to the new chipset and enhanced memory. With Apple Intelligence fully rolled out by then, the SE could present stiff competition to the iPhone 16 Pro and iPhone 16 Pro Max, further impacting their sales.
In conclusion, while the iPhone 16 Pro may not be driving the expected sales, Apple’s focus on affordable models like the iPhone 16 and the upcoming SE could turn things around.