Dampened enthusiasm for new iPhone launch expected

United States technological company Apple Inc is expected to see weaker-than-expected demand for its new iPhone 16 series during the first weekend of sales, as it faces stiff competition in the Chinese market from the trifold smartphone from Huawei Technologies Co, said industry experts.

They added that as global smartphone manufacturers push forward with rapid product launches and major innovations, China's consumer electronics sector is expected to experience a rebound in the third quarter and drive economic recovery as a whole.

Ming-Chi Kuo, an analyst at TF International Securities, predicted that preorders for the iPhone 16 series will reach around 37 million units during its opening weekend, which will be a 12.7 percent decline on sales of the iPhone 15 series during the same period.

Preorders for the new iPhones began last Friday and the official sale will start this Friday, but the phone's first AI-boosted features, dubbed as Apple Intelligence, won't launch until next month in a beta version.

Kuo said that one of the key factors for the lower-than-expected demand is that its major selling point, Apple Intelligence, is not available at the launch alongside the iPhone 16 series.

"But Apple still has opportunities to improve sales through the release of Apple Intelligence and some peak season promotion events, like China's Double Eleven or 11-11 shopping spree," he added.

Analysts at British bank Barclays said that "the delayed rollout of Apple's AI function may dampen early enthusiasm for the iPhone 16 series".

Another major reason for the lower demand is the intense competition among high-end smartphone brands in the Chinese market, which weighs on iPhone's sales globally, according to the analysts.

Just hours after Apple unveiled its iPhone 16 series earlier this month, Huawei debuted its new Mate XT, a phone which users can fold three ways.

Data from Huawei's official shopping site showed that more than 6.25 million people preordered the Mate XT within 10 days till Tuesday.

Huawei's Mate XT starts at 19,999 yuan ($2,820), which is about three times as much as the latest iPhone 16 Pro that starts at $999.

Industry experts said that Huawei's trifold smartphone is likely to become "more of a symbol of its tech prowess than a major sales driver".

Will Wong, senior researcher at market research firm International Data Corporation, said: "Production constraints and the high price point mean the new phone will likely not have a huge impact in terms of shipments. But it's telling the consumers that it's still one of the major tech players and the potential challenge it brings to Apple may be far beyond just market share."

According to market consultancy Counterpoint Research, Huawei had a market share of 15.4 percent in the second quarter of 2024 in the Chinese market, compared with Apple's 15.5 percent market share during the period.

Fan Zhiyuan, an analyst at Sinolink Securities, said that as major manufacturers like Apple and Huawei accelerate the exploration and launch of new products, China's consumer electronics industry will see a rebound in the third quarter.

"In the long term, major innovations coming with the product launches are expected to empower the country's consumer electronics sector and the economy as a whole, driving new demand for device upgrades," Fan said.

Data from the Ministry of Industry and Information Technology showed that major indicators of the country's consumer electronics industry in the first half of 2024 saw significant improvement year-on-year. The production of smartphones hit a staggering 563 million units in the first six months, up 11.8 percent year-on-year.