Apple Inc.'s (NASDAQ:AAPL) latest iPhone Air is struggling to gain traction, as top analyst Ming-Chi Kuo says the existing iPhone Pro and standard models already satisfy the majority of high-end users.
iPhone Air Fails To Capture Market Share
On Wednesday, renowned Apple analyst Kuo took to X, formerly Twitter that demand for the iPhone Air has fallen short of expectations.
He noted that the company's high-end market is largely dominated by the Pro and standard series, leaving limited room for new variants.
"This indicates that the existing Pro series and standard models already cover the majority of high-end user demand well, leaving little room to carve out new market segments and positioning — as previous attempts with the mini, Plus, and now Air models have all failed to gain traction," Kuo wrote.
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Apple Cuts Air Production, Boosts Flagship Orders
Kuo's statement came after it was reported that Apple had reduced production orders for the iPhone Air nearly to end-of-production levels. As per the report, production from November onward will drop to less than 10% of September's volume.
Meanwhile, demand for the iPhone 17 and iPhone 17 Pro has exceeded expectations, prompting Apple to increase production for these models.
Despite tariffs and a slow global smartphone market, Apple plans to maintain iPhone 17 production at 85–90 million units.
Kuo also said, "Most suppliers are expected to reduce capacity by more than 80% by 1Q26, while some components with longer lead times are expected to be discontinued by the end of 2025."
Strong Sales For iPhone 17 Drive Growth
iPhone 17 models have outsold iPhone 16 units by 14% in the U.S. and China during the first 10 days of launch, according to Counterpoint Research.
Key drivers include upgraded chips, larger storage, better displays and improved selfie cameras.
Following the Counterpoint report, Wedbush analyst Dan Ives said, "With Apple on the doorstep of joining the $4 trillion market cap club, it’s clear that Cook & Co. have a hit with iPhone 17. Now it’s the AI roadmap."
Loop Capital's Ananda Baruah, who upgraded Apple stock to Buy, said this could mark the beginning of a multi-year iPhone growth cycle extending through 2027.
Apple is set to release its fourth-quarter earnings after the market closes on Oct. 30. Analysts surveyed by Benzinga Pro anticipate the company will report earnings of $1.76 per share on revenue of $101.67 billion.
Benzinga's Edge Stock Rankings place Apple in the 76th percentile for Quality, reflecting solid long-term fundamentals and strong investor confidence. Click here to see how it compares to rivals.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
