Morgan Stanley and Barclays Analysts Say iPhone Sales Off to a Slow Start

Technology

Published: September 17, 2024 6:50 am

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Apple Inc. (NASDAQ: AAPL) launching the iPhone 16 without an upcoming software upgrade may have been a mistake.
It may have killed a share price rally.
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Morgan Stanley and Barclays analysts say that iPhone sales may be off to a very slow start. People were able to order the new smartphone last Friday. Launching it without a software upgrade coming next month may have been a mistake.

This revolutionary software—according to Apple Inc. (NASDAQ: AAPL)—delivers advanced artificial intelligence (AI) features for buyers of the iPhone 16 through a new operating system, iOS 18. This operating system rollout, compared to the hardware one, will be later than any time in Apple’s history. If so, iPhone sales could be well below expectations, undermining the chance of a stock price increase following the launch of the latest iPhone model.

Examining earlier analyst opinions, The Wall Street Journal published the most pessimistic one. David Vogt of UBS said in a report that “we don’t view the AI-related offerings as compelling enough in the near term to drive significant demand.” Essentially, his question is whether buyers of the new iPhone will hold off until they see the new iOS features. Apple will have killed what might have been a share rally.

Additionally, some of Apple’s primary competitors in China, and global giant Samsung, have AI features of their own. Google AI powers Samsung’s newest smartphones.

After dropping early in the year, mostly due to slow sales in China, Apple stock regained its footing against the S&P 500. The recent runup was due to the belief that the iPhone 16 will get major AI components. These components were announced in June, with few details. If the unit sales pace disappoints, so will the share price action.

Prediction: Apple Turns Rotten in October