According to Apple analyst Kuo, the company reduced iPhone 16 orders by 10 million units.

• On Wednesday, Apple shares dropped approximately 2% following Ming-Chi Kuo's announcement that the company had reduced iPhone 16 orders by around 10 million units.
• According to Kuo, most of the cuts affect the standard iPhone 16 rather than the iPhone 16 Pro models, which boast superior displays and cameras and have garnered greater consumer interest.
• According to Kuo, the estimated production of iPhone 16 for 2H24 has been revised to 84 million units, which is lower than the initial estimate of about 88 million units.

On Wednesday, shares of the company dropped about 2% after Ming-Chi Kuo, an industry supply chain analyst, announced that the company had reduced its orders for the iPhone 16 by approximately 10 million units for the fourth quarter of this year and the first half of 2025.

According to Kuo, most of the cuts affect the standard iPhone 16 rather than the iPhone 16 Pro models, which boast superior displays and cameras and have garnered greater consumer interest.

According to Kuo, his estimate for iPhone 16 production in 2H24 is now 84 million units, which is lower than his previous estimate of about 88 million units.

Kuo predicts that Apple partners will manufacture 80 million iPhones in the fourth quarter, a decrease from approximately 84 million units produced last year. He anticipates the production of 45 million units in the first quarter of 2025 and 39 million units in the second quarter, both down from 48 million and 41 million, respectively.

According to Kuo, iPhone revenues are predicted to decrease in 1H25 because of a decline in year-over-year shipments and an unfavorable product mix resulting from the launch of the iPhone SE4 in December. Apple's iPhone SE models are typically the most affordable in its product line, but they are not updated on a yearly basis.

"According to Kuo, Apple is well-positioned to succeed in on-device AI and has great potential to become a popular paid service in the long run. However, he believes that significant growth in iPhone shipments will necessitate further hardware innovation to complement the AI development."

The upcoming iOS 18.1 update is expected to include Apple Intelligence as a beta feature for new users to try. This feature is supported by the latest iPhone 16 phones and last year's iPhone 15 models. The initial features will allow users to summarize text messages and emails, set automatic replies for text messages, and more.

Apple didn't immediately respond to a request for comment.