In a recent interview, renowned industry analyst Ming-Chi Kuo shared some significant insights regarding Apple’s upcoming plans and performance predictions. Kuo noted that Apple has reduced its order for the iPhone 16 by 10 million units, affecting the production outlook for the end of this year and the first half of 2025.

On Wednesday, Apple’s stock saw a decline of 2.2%, attributed to the broader tech sector’s downturn. Kuo elaborated that most of the cuts were primarily for the non-Pro models, which has led to a decrease in the expected production for the second half of 2024 to around 84 million units, down from his earlier estimate of 88 million.

Looking ahead, Kuo has revised his projections for Apple’s suppliers, predicting that they will produce 80 million iPhones in the fourth quarter, a decrease from approximately 84 million units last year. For the first quarter of 2025, he estimates production at 45 million units, and for the second quarter, he forecasts 39 million units—both figures falling short of last year’s 48 million and 41 million, respectively.

Kuo expressed concern that Apple’s iPhone revenue will face pressure in the first half of 2025 due to a year-over-year decline in total shipments and the release of the iPhone SE 4, which may negatively impact the overall iPhone product mix. He anticipates that Apple will launch the iPhone SE 4 in December, noting that while the SE series typically offers more affordable options, it does not see annual updates.

In a positive outlook, Kuo stated, “I believe Apple is the brand with the greatest potential for success in device-based AI.” He also pointed out that in the long term, Apple Intelligence could become a widely popular paid service. However, he added that significant growth in iPhone shipments may require additional hardware innovations.

Lastly, Kuo mentioned that the upcoming iOS 18.1 update is likely to include new testing features for the latest iPhone 16 and last year’s iPhone 15. The initial offerings will allow users to summarize text messages and emails and to set automatic replies for text messages.