Recently, shares of Apple (AAPL, Financial) fell by 2.16%, largely due to two significant setbacks. Notable Apple supply chain analyst Ming-Chi Kuo has reported that Apple plans to cut orders for the iPhone 16 by approximately 10 million units. Additionally, reports indicate that Apple has significantly reduced production of its Vision Pro headset in recent months.
Ming-Chi Kuo revealed that the majority of iPhone 16 order cuts affect the standard version rather than the iPhone 16 Pro, which is more popular due to its advanced features. He estimates that iPhone 16 production for the latter half of this year will total around 84 million units. Furthermore, Apple is expected to produce 80 million iPhones in the fourth quarter, down from 84 million in the same period last year, with first and second quarter production in 2025 projected to be below current levels.
The analyst noted that iPhone revenues might face pressure in the first half of the next year due to declining shipments and the introduction of the iPhone SE4, which could affect the overall product lineup. Production of the iPhone SE4, typically Apple's most affordable model, is expected to begin in December, with a production estimate of around 8.6 million units through the first quarter of next year.
Kuo remains optimistic about Apple's potential in AI technology, suggesting that innovations in this area could eventually become a popular paid service. Apple's AI features will debut in beta with the upcoming iOS 18.1 update, enhancing user experiences on the latest iPhone models.
In terms of the Vision Pro, Apple has reportedly reduced its production since early summer and may halt the current version's manufacturing by the end of the year. Originally launched in February, Vision Pro has struggled with consumer demand due to its high price point of approximately $3,500, compared to competitors like Meta’s Quest 3, which costs about $500.
Sources from Vision Pro supply chain manufacturers have indicated that parts sufficient for 500,000 to 600,000 units have already been produced, but production halted as early as May in some factories. Apple has allegedly informed assembly partner Luxshare Precision of potential production stoppages in November.
