Apple shares experienced a significant decline of approximately 3% on Monday, trading at $215.90 per share and triggering a broader tech sector selloff that impacted the Nasdaq Composite. The downturn follows disappointing pre-order numbers for the newly launched iPhone 16 series.
According to TF International Securities analyst Ming-Chi Kuo, the iPhone 16 series secured approximately 37 million pre-orders during its first weekend — falling nearly 13% short of the iPhone 15’s debut performance last year. This underwhelming demand is directly attributed to the absence of Apple’s most anticipated feature: Apple Intelligence, the company’s AI-powered suite of capabilities.
Kuo emphasized in his Sunday analysis that the delayed availability of Apple Intelligence represents a critical factor in the lower-than-expected demand, particularly for the iPhone 16 Pro series. Apple announced last week that Apple Intelligence will begin rolling out in English next month, with additional features being introduced gradually in subsequent months. However, AI integration for other languages won’t be available until 2025, creating a significant gap between product launch and its marquee feature.
The ripple effects of Apple’s decline extended throughout the technology sector. The Nasdaq Composite dropped 0.8%, while the S&P 500 remained nearly flat and the Dow Jones Industrial Average posted slight gains. Major semiconductor companies bore the brunt of the selloff, with Micron and Broadcom falling 4.5% and 3% respectively. Super Micro Computer declined approximately 1%, while Taiwan Semiconductor Manufacturing Company (TSMC), Apple’s primary chip manufacturer, saw its stock drop about 3%.
This setback comes after four consecutive months of gains for Apple, driven largely by optimistic forecasts about higher iPhone sales powered by new AI features. The stock has gained around 12% year-to-date, slightly trailing the Nasdaq’s 15% increase during the same period.
Kuo warned that if shipments fail to increase following the Apple Intelligence rollout and holiday season promotions, Apple will likely need to implement more aggressive product strategies in 2025 to stimulate market demand and maintain its competitive position in the AI-enhanced smartphone market.
Key Quotes
One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release
Ming-Chi Kuo, analyst at TF International Securities, explained in his Sunday note why iPhone 16 pre-orders fell 13% short of expectations. This statement directly connects the disappointing sales performance to the absence of AI features at launch.
In that case, I believe that Apple will implement more aggressive iPhone product strategies in 2025 to stimulate market demand
Kuo warned about potential strategic shifts if Apple Intelligence and holiday promotions fail to boost shipments. This suggests Apple may need to fundamentally rethink its approach to AI feature integration and product launches.
Our Take
Apple’s iPhone 16 stumble reveals a fundamental shift in consumer technology: AI capabilities are no longer differentiators but requirements. The company’s decision to launch hardware before its flagship AI software was ready has backfired, demonstrating that consumers are willing to delay purchases for AI features. This represents a watershed moment where AI readiness dictates product launch success more than hardware specifications. The cascading effect on chip manufacturers signals that the entire semiconductor industry’s fortunes are now tied to AI feature deployment timelines, not just device sales. Apple’s predicament also exposes the complexity of deploying AI at scale — with language support delays pushing international availability into 2025. This could open opportunities for competitors like Samsung and Google who have more mature AI integrations. The market’s reaction suggests investors are recalibrating expectations around AI monetization timelines.
Why This Matters
This development represents a critical inflection point for AI integration in consumer technology. Apple’s stumble demonstrates that consumers are increasingly making purchasing decisions based on AI capabilities, not just hardware specifications. The 13% shortfall in pre-orders specifically tied to the absence of Apple Intelligence signals that AI features have become essential selling points rather than optional enhancements.
The broader market impact — with semiconductor stocks tumbling alongside Apple — reveals how deeply intertwined the AI ecosystem has become. TSMC, Micron, and Broadcom’s declines underscore the supply chain dependencies on AI-driven device demand. This incident also highlights the risks of announcing AI features before they’re ready for deployment, as Apple’s delayed rollout has created a gap between consumer expectations and product availability. For the AI industry, this serves as a cautionary tale about the importance of timing and execution in bringing AI capabilities to market. The pressure on Apple to potentially pivot its 2025 strategy suggests that AI integration timelines will increasingly dictate product development cycles across the tech industry.
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