Apple has put a lot behind the iPhone 16’s launch, especially considering its promises of AI features in its Apple Intelligence suite. However, the lineup doesn’t seem to sell as well as Apple hoped, and news of production cuts cement that observation.
Insider Ming-Chi Kuo reports that Apple has slashed iPhone 16 production by nearly 10 million units for almost three quarters, starting from the last quarter of 2024 to at least the first half of 2025. However, Apple has saved some face as the cuts seem to be coming to the standard and Plus variants, meaning demand for the Pro lineup might be what the company expected. Here’s a quarterly breakdown of the company’s production with the cuts
- Q4 2024: 80 million units (vs 84 million in Q4 2023)
- Q1 2025: 45 million units (vs. 48 million in Q1 2024)
- Q2 2025: 39 million units (vs. 41million in Q2 2024)
Given the price difference between the Pro and regular iPhone 16 lineups, the company’s revenue isn’t expected to take a hit despite the lower production. The iPhone 16 Pro Max, the most expensive iPhone in the new lineup, is expected to be the company’s top-selling phone. Apple might make it unscathed despite a bigger gap between iPhones produced and sold in Q4 2024 and Q4 2023.
That said, the first half of 2025 might be a different story. As the expected launch of the iPhone SE4, the company’s lower-end, budget iPhone lineup looms, the average price is expected to go down, at least partially. Kuo claims that mass production of the iPhone SE4 will start in December 2024, with a projected production of around 8.6 million units from December 2024 to Q1 2025.
For those believing Apple Intelligence might boost the company’s iPhone sales, the production cut also suggests that AI hasn’t quite done as well to boost sales as Apple hoped it would. The position might reverse in the long term, though, as Kuo also believes that “growth in iPhone shipments will likely require further hardware innovation to accompany this AI development.”
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