The iPhone 16 did not excite consumers enough to warrant a smartphone supercycle, and sales growth will be just 3% year over year instead of previously projected 5%. Yesterday, analysts at Morgan Stanley and UBS both noted that iPhone 16 lead times are tracking lower than previous years. Discuss it all. Bloomberg Intelligence senior analyst Anurag Rana, did these numbers catch you by surprise? Yeah, I think the surprising factor was we thought it would at least match last year's refresh rate, but it declined slightly. So when you look at it and you ask people like, you know, how in the next 12 months how many people are going to upgrade their phones and that number is somewhere around 55%. Last year it was around 60. The year before, it was 64. So every year we are seeing a decline in that number, which means people are keeping their phone for a longer period of time.

Now, whether that's driven by cost or whether that's driven by the phone being much better than previous years. But, you know, one would have thought with air features, you could have seen a slight bump in that. An Iraq survey data has been a big focus for Apple investors recently. Could you kindly explain the methodology of the Bloomberg Intelligence survey for the iPhone 16 and also kind of the breadth and depth of the data that you obtained? Yeah. In this case, we go out and look at us consumers and see what kind of phone are they looking to buy, whether they are looking to buy the Promax phone or the pro phone. What are the reasons they want to upgrade? How many of them want to upgrade? How many of them want to switch over? And one thing was clear whether it was Android users or Apple users, both said that they're going to keep the phone for a longer period of time. Apple intelligence actually fell really

low in the ranking of the reasons they want to upgrade. The reason still remains the same that the last few years, whether it's storage, processing, power, or camera, which was in line with what we were expecting. Now, one reason for this could be that we haven't really seen the software upgrade in terms of any new features that consumers are using. These phones are capable of doing it, but we don't have those features and that will be launched over the next 12 months. So I think that sentiment could change as we see these features launch over the next year or so. And that is where the tension lies. Investors looking towards the longer-term adoption here, perhaps not this particular moment of frenzy outside the stores. I agree with you. And in fact, we think next year's model is going to be a bigger upgrade or reason for people to upgrade because it's going to look different. The hardware Mark Gurman has done a very good job of telling people that iPhone

17 is where you should see some improvement in that. And hopefully by that time, we will see all the features launch. So those two factors, I think, would be compelling enough for Apple iPhone sales to go up dramatically.

Apple's iPhone 16 Receives a Lackluster Reception

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