Steve Kovac is outside the company's headquarters in Cupertino, CA
with what to expect, Steve.
Hey there, John.
Yeah.
And today it's going to be our first read on
iPhone 16 demand.
That's what everyone has been trying to game out, especially
how Apple intelligence is going to factor into that demand
picture.
Now, this report is going to also reflect the first
several days of iPhone 16 sales.
That'll give us a hint at least how much it's
been comparing to the initial iPhone 15 launch last year.
And also since the iPhone 16 launch, the Street has
really been trying to figure out what sales look like,
and it's not been a pretty picture so far.
Let's start with analyst Ming Ching Kuo of TFI International
Securities.
He said earlier this month Apple cut 10 million iPhone
16 orders, which is more than usual for this time
of year.
But Apple intelligence just launched on Monday.
And the question now is, will that demand picture change
now that Apple's artificial intelligence system is finally here?
Still, that super upgrade cycle the bulls have been predicted
for months now, it could take longer to happen.
That's because most of the AI features Apple's been talking
about for the last several months, they just aren't ready
yet.
The big stuff that everyone's looking forward to ChatGPT integration,
updated Siri and integration with all your apps on your
phone.
That is coming over the next several months, even into
2025.
And by the way, John, besides the iPhone, pay attention
to services.
That business is really booming again after a post pandemic
slump.
Apple said to expect services to be up double digit
percentage points.
Again in this report, you see services picking up some
of the slack from the iPhone business.
John, yes, Steve, hopefully get some clarity.
This seems to be every week a different analysts report
bullish, bearish about iPhone 16.
But even on this issue of potentially orders being cut,
we don't know what the starting point was, how many
of these 16 phones Apple made in the 1st place.
If they made a whole bunch going into sales and
maybe an order cut isn't that big of a deal
if they're expecting a different kind of ramp with Apple
intelligence coming out, right?
That's exactly right.
I'd also note that Quo said it is these are
the most of those cuts are for the regular iPhone
16, not the Pro, which is another good sign for
Apple because obviously they make more money off of those
Pro models.
Those are the ones they advertise the heaviest.
Those have the best and latest and greatest cameras and
processors that are also capable of doing this artificial intelligence
stuff.
So that is another important factor to go in.
The other thing is as we started getting these demand
signals early on since the iPhone 16 launch is whether
or not, like you said, maybe supply is actually better
this year.
We've seen in past years Apple how to kind of
work through those COVID supply chain issues.
Those have largely cleared out.
They're also adding capacity to build iPhones and countries like
India, for example.
So that could be helping balance that demand picture as
well.
We won't know for sure until we hear from Apple
though tonight.
John, I suspect that if you happen to see Tim
Cook around there today, you'll ask him about some of
that.
I don't know.
Something tells me so that could he might be wondering
around behind me.
We'll see.
Steve, thanks.