Barclays Analysts Predict Minimal Upgrades in iPhone 16

Barclays analysts recently released a research note foreseeing minimal advancements in Apple’s upcoming iPhone 16 compared to its predecessor, the iPhone 15 (via 9to5Mac).

The research highlighted several concerning trends for Apple, outlining anticipated weaknesses in iPhone volumes and product mix, as well as subdued growth for Macs, iPads, and wearables.

Due to these projections, Barclays marginally adjusted its target for Apple’s stock price, down from $161 per share to $160 per share.

Outlined in the report are key takeaways:

1. Barclays foresees ongoing weaknesses in iPhone sales, extending into the launch of the iPhone 16. They cite lackluster volumes and product mix for the iPhone 15, with no anticipated standout features or upgrades in the forthcoming iPhone 16.
2. The analysts stress the necessity for Mac and iPad sales to revert closer to pre-COVID levels. Despite industry corrections, these products currently operate at 20-30% above pre-pandemic levels, indicating a need for further adjustments.
3. A projected slowdown in Services growth is expected, compounded by regulatory risks. Anticipated growth estimates for Services in FY24 and FY25 stand at around 10% and 8%, a significant drop from earlier estimates of approximately 20%. Regulatory scrutiny on Google TAC and app store investigations may intensify in 2024.
4. The report also highlights diminishing returns on Apple’s ecosystem, indicating a shift from a Mac-centric to an iPhone-centric ecosystem. Analysts anticipate reduced ecosystem traction with new products or services, posing challenges for sustained growth in the coming years.

For the iPhone 16, Barclays’ supply chain analysis indicates recent reductions, weak sell-through, and a shift towards base models rather than higher-priced Pro versions.

Analysts anticipate the iPhone 16 to offer “very little feature/function difference compared to the iPhone 15,” implying minimal enhancements in the upcoming model.