In October 2024, Apple announced the release of its AI package, Apple Intelligence, with initial features. However, this package will not be available in Germany until April 2025. Despite the anticipation, these AI features have not significantly increased iPhone demand, contrary to Apple’s hopes. According to Apple analyst Ming-Chi Kuo, there is no evidence of a rise in demand.
Kuo conducted a survey among companies in the iPhone supply chain, which revealed no increase in demand for iPhone parts. This suggests that the allure of the AI package has diminished. Unlike cloud-based AI services like OpenAI’s ChatGPT or Google’s Gemini, which have rapidly advanced and attracted more users, Apple Intelligence has not had the same impact.
Apple’s estimated iPhone sales for 2025 are between 220 and 225 million units, similar to the 220 million units sold in 2024. This is below the market consensus, which expects sales of 240 million or more. This indicates a lack of strong market confidence.
In China, Apple’s market share is also declining. In December 2024, Apple sold 10 to 12 percent fewer iPhones compared to the previous year, even though the overall Chinese market only saw a slight decrease. For the first half of 2025, Kuo predicts a further six percent decline in China, despite the expected launch of the new iPhone SE 4. This could lead to a significant loss of market share in this crucial region.
An unexpected factor that might affect Apple’s performance in China is the introduction of the next iPhone generation, expected in fall 2025. According to Kuo, two of the upcoming iPhone models will be so thin that they can only operate with e-SIM cards. Unfortunately, e-SIM cards are not widely available in China, which could hinder sales.
In summary, Apple’s AI package, Apple Intelligence, has not sparked the expected increase in iPhone demand. The company faces challenges in both global and Chinese markets, with estimated sales not meeting market expectations. Additionally, the potential e-SIM requirement in future iPhone models could further complicate Apple’s efforts in China.