Yesterday, the three major US stock indexes collectively closed higher overnight, with the S&P 500 index hitting a new historical high and the Dow Jones index also reaching a new all-time closing high.

$Apple (AAPL.US)$Also performing strongly in recent days, seemingly emerging from the shadow of Buffett's 'major shareholding reduction.'

With the successful conclusion of the Apple launch event, various aspects of the new phones and features are gradually being implemented. How is the specific situation?

New phone sales meet expectations, research shows that the material cost of iPhone 16 Pro Max is 7% higher than its predecessor.

Firstly, the most anticipated new phone shipment data.

According to the widely regarded as the 'most accurate Apple analyst' Ming-Chi Kuo's latest shared shipment data on social media, the performance of the iPhone 16 series seems not as bad as expected. Assembly orders have remained almost unchanged, with suppliers being asked to continue production over the 'Golden Week' holidays for the two Pro series, indicating that the demand for the two Pro models so far roughly meets expectations.

In addition, the market research institution TechInsights' report pointed out that from the third week of the listing window to the present, Apple's iPhone 16 Pro model continues to maintain strong demand.

Tianfeng Securities previously indicated in their research report that the wait time for the launch of the new iPhone 16 has been shortened. The institution believes that due to some supply disturbances compared to the same period last year, there is no need to be overly pessimistic about the demand in the short term. This year's new iPhone sales are close to those of last year, with higher popularity for high-end models in the overall product lineup. They continue to have a bullish outlook on Apple's three-year innovation cycle.

Of course, Guo Mingchi also revealed that Apple has slightly reduced some component orders after mid-November, but mainly for the two standard models, iPhone 16 and 16 Plus, and the reduction is less than 3% to 5%.

Furthermore, according to the research institution TD Cowen's latest survey, manufacturing a 256GB iPhone 16 Pro Max, including components, product assembly, and packaging, the total material cost is $485. In comparison, the material bill of materials (BOM) for the Apple iPhone 15 Pro Max is $453, so the cost of the iPhone 16 Pro Max is $32 higher than the previous generation, representing a 7% increase.

On the iPhone 16 Pro Max, the most expensive components are the display screen and the rear camera module, each costing $80, accounting for 16% of the total cost. The camera is also the component with the largest increase compared to the previous generation, increasing by $10. The memory and storage costs have increased by $5 each.

In contrast, the material cost of the iPhone 16 standard version has also increased to $416, with the material bill of materials for the iPhone 15 at $395, a difference of $21. This will have a certain impact on the overall gross margin of the new device.

AI features are about to be launched, how do Wall Street analysts view this?

It is worth mentioning that Apple is expected to push some Apple Intelligence functions for iOS 18 models in late October. This may have a certain boosting effect on the shipments in the US market. However, objectively speaking, the current functions of Apple Intelligence are not particularly innovative, and it may also be difficult to stimulate consumers' desire to purchase new phones.

After the iPhone 16 is released without Apple Intelligence, Bloomberg's Mark Gurman predicts that Apple's AI image, emoji generation, and ChatGPT functions will not be available until at least December in some English-speaking countries, as consumer wait-and-see attitudes delay the demand for upgrades. Non-English-speaking countries will have to wait until next year for the AI features to be launched.

Jefferies Financial Analyst Edison Lee stated that this new iPhone is the first model equipped with AI functionality. It is unrealistic to have high expectations for the iPhone 16 and iPhone 17 as they lack substantial innovative features and have limited AI applications. The market's expectations for sales growth (5%-10%) may not be realized, hence the hold rating is given, whereas it was a buy rating previously.

Lee believes that although Apple has potential in the field of AI in the long term, especially because it is the only player who can provide low-cost, personalized AI services using its own data as a hardware and software integrated player, he also points out that Apple's current valuation is 'high' and in the short term AI will not be the main driver of growth. Hardware improvements in smart phones are needed to truly support powerful AI features, which may not be achieved until 2026 or 2027.

Furthermore, on the 1st of this month, Barclays Bank in the United Kingdom took a pessimistic view of Apple's prospects. The institution's analyst report stated that based on recent supply chain channel checks, Apple may have cut production of key iPhone semiconductor components by approximately 3 million units in the third quarter. If confirmed, this would be the earliest order cut in the latest smartphone sales cycle. Since the iPhone still accounts for nearly 60% of Apple's revenue, this will have a significant impact on next year's profits.

Barclays analysts further pointed out that the staged launch of Apple's 'Apple Artificial Intelligence' AI platform is a major obstacle to early sales. Apple plans to launch 'Apple Artificial Intelligence' in mid-October in the USA, with other language support plans scheduled for next year, which may further delay early demand.

In addition, analysts from Bank of America and JPMorgan, among other institutions, also pointed out that the shipping time of Apple's new phone this time may indicate lower demand in the market for the iPhone 16 Pro model compared to the previous year.

Compared to other large technology companies, Wall Street is more cautious about Apple. Only 65% of analysts recommend buying Apple stocks, while this proportion for Microsoft, Nvidia, and Amazon is close to or exceeds 90%.

Editor/ping