iPhone’s lack of two key options — generative AI and a foldable design — might trigger a major decline in shipments in 2024. TF Worldwide Securities analyst Ming-Chi Kuo says with out these advances, the iPhone will fall behind amid a “new paradigm in high-end cell phone design.”
Kuo cites provide chain sources to again up his predictions. Nevertheless, there are quite a few causes to doubt his opinion.
Kuo: Lack of folding iPhone and AI will harm Apple in 2024
Kuo has been monitoring Apple for greater than a decade. Over time, he constructed a set of sources inside the businesses that make elements for Apple units. This insider data permits him to make predictions concerning the firm’s strikes that usually show correct.
And the analyst stated Tuesday, “My newest provide chain survey signifies that Apple has lowered its 2024 iPhone shipments of key upstream semiconductor elements to about 200 million models (down 15% YoY).”
The analyst says Apple is lacking options smartphones must succeed: “The brand new high-end cell phone design paradigm contains AI (GenAI) and foldable telephones.”
Kuo says his trade sources inform him that Samsung is growing manufacturing of the Galaxy S24 collection due to its new generative AI options.
No AI for iPhone?
Kuo’s pessimism concerning the 2024 iPhone as a result of it lacks cutting-edge AI options appears to disregard the leaks indicating that when Apple unveils iOS 18 in June, the iPhone working system will probably be filled with new synthetic intelligence capabilities.
Particulars on these stay sketchy, admittedly. However Bloomberg reported Sunday that “the brand new working system is seen inside the firm as one of many greatest iOS updates — if not the largest — within the firm’s historical past.”
The interval after Samsung unveiled its new 2024 fashions however earlier than Apple has executed so is the improper time to declare that Samsung has an AI benefit.
Is not any folding iPhone an actual drawback?
Kuo’s different main cause for pessimism about this 12 months’s iPhone lineup is an growing demand for handsets with folding shows, a product class Apple doesn’t at present compete in.
“The principle cause for the decline within the Chinese language market is the return of Huawei and the growing desire for foldable telephones amongst high-end customers as their first selection for telephone alternative,” stated the analyst.
An growing desire is all very effectively, nevertheless it’s ranging from a really low level. IDC says 1.2% of telephones shipped globally in 2022 had been foldables. This market-analysis agency predicts shipments of this sort may make up a mere 3.5% of the full in 2027.
Given the small share that such a handset at present makes up of the world market, it’s laborious to consider that the shortage of a folding design will play a major position in decreasing iPhone shipments in 2024.
Information of decreasing iPhone manufacturing sounds dangerous. But it surely additionally ought to sound acquainted to long-time Apple watchers. Cupertino reportedly lower iPhone manufacturing early final 12 months, however Apple ended up main the world in telephone shipments in 2023.
Trying additional again, a chip scarcity harm iPhone manufacturing in 2022. And we heard warnings of iPhone manufacturing issues in 2021 and lowered manufacturing in 2019 and 2018. One would assume Apple has been fighting demand issues on and off for a few years. Not that Apple’s one of many world’s most profitable telephone producers.
In brief, analysts warn of decreased iPhone manufacturing nearly yearly — and infrequently, nothing comes of it.
Lowered demand in China?
Kuo says, “Apple’s weekly shipments in China have declined by 30–40% YoY in current weeks, and this downward pattern is predicted to proceed.”
Once more, that sounds dangerous. However weighed towards it’s the current report that iPhone ranked as China’s top-selling smartphone in 2023.
So there was big demand for iPhone final 12 months. However just a few weeks into the brand new 12 months, that’s supposedly dried up out of the blue? There’s a discrepancy someplace. It’s potential Kuo’s supply(s) indicating slowing iPhone shipments to China acquired issues improper. On the very least, they is perhaps overly pessimistic.
And that is perhaps true for all of Tuesday’s report from Ming-Chi Kuo: It might be overly pessimistic.