Apple Targets 90M iPhone 16 Shipments, Shares Hit $232.74

Apple targets 90 million iPhone 16 shipments in 2024, a 10% increase from 81 million iPhone 15 units in 2023.

By Bill Bullington

7/10, 12:42 EDT
Apple Inc.

Key Takeaway

  • Apple aims to ship 90 million iPhone 16 units in H2 2024, a 10% increase from the previous year's iPhone 15 shipments.
  • Following the announcement, Apple shares surged by up to 1.8%, reaching a record high of $232.74.
  • Despite strong demand recovery in China since April, stringent AI policies and regulatory challenges pose significant hurdles for Apple's growth in the region.

iPhone 16 Shipment Targets

Apple Inc. is setting ambitious goals for the latter half of this year, aiming to ship at least 90 million iPhone 16 devices. This target represents a 10% increase compared to the 81 million iPhone 15 units shipped in the second half of 2023. The company is banking on the integration of new Apple Intelligence features to drive demand for its latest lineup. According to sources familiar with the matter, Apple has communicated these targets to its suppliers and partners, reflecting its confidence in a stronger 2024 performance. This optimism comes despite the competitive landscape, where Apple faces rivals like Samsung Electronics Co. and Xiaomi Corp., who are also enhancing their smartphones with AI capabilities.

Market Reaction and Stock Performance

Following the announcement of its iPhone 16 shipment targets, Apple shares saw a notable increase. The stock gained as much as 1.8%, reaching a record high of $232.74. This surge adds to the 19% increase in Apple’s stock value for the year through Tuesday’s close. The market's positive reaction underscores investor confidence in Apple's strategy to leverage AI features to boost iPhone sales. However, Apple declined to comment on the shipment targets or the market's response.

Challenges in China

Apple's performance in China has been a mixed bag. The iPhone experienced a slow start in 2024, as indicated by government data and independent research from market trackers like Counterpoint Research. However, demand began to rebound strongly since April, driven by a series of discounts, especially leading up to the "618" shopping event on June 18. Despite this recovery, Apple faces significant challenges in China, including stringent AI policies that could complicate its efforts to integrate AI into its products. Nicole Peng, a senior vice president at Canalys, noted, "Stringent Chinese restrictions may hamper the company’s initial attempts to build AI into its products."

Additionally, Apple has been playing catch-up in the AI space, lagging behind companies like OpenAI and Alphabet Inc.'s Google. Although Apple announced a partnership with OpenAI in June, it still needs to find a local partner in China, as OpenAI’s ChatGPT is not available in the country. Beyond AI, Apple also faces a fundamental challenge in its largest market outside the US. Many Chinese agencies and government-backed firms have ordered staff to stop bringing iPhones and other foreign devices to work, as part of Beijing's efforts to reduce dependence on foreign technology.

Legal and Regulatory Hurdles

Apple's challenges in China extend to the legal and regulatory arena. The company recently filed a petition with the Supreme People’s Court to remove references to its "dominant position" from a lower court decision. This move highlights Apple's increasingly sensitive position in the country. The ruling in question had concluded a dispute over the cut of app revenue that Apple takes from most developers. This legal maneuver underscores the complex regulatory environment Apple must navigate as it seeks to expand its market share and integrate new technologies.

Street Views

  • Nicole Peng, Canalys (Neutral on Apple's AI strategy in China):

    "Stringent Chinese restrictions may hamper the company’s initial attempts to build AI into its products."