Apple CEO Ternus Faces First Big Test As Bernstein Finds Soft US iPhone 18 Pro Demand

John Ternus' first big test at Apple is launching the premium iPhone 18 lineup and the likely delayed iPhone Duo, which reportedly faces production difficulties ahead of its October launch.

The latest sign of iPhone demand came Monday from Bernstein technology analyst Mark Newman, who said global iPhone sales rose in August, extending an 18-month streak of annual volume growth, though early demand indications for the new premium 18 Pro lineup softened in the US and several other major markets.

"Initial market feedback on iPhone 18 Pro & Pro Max is mixed vs. the 17 lineup. In the US, Pro & Pro Max demand is down low single digits YoY with Pro waiting times shorter vs. Pro Max were longer. China, however, saw launch week sales up 12% YoY. Other regions were mixed," Newman wrote in the note.

Global iPhone sales rose 7% from a year earlier, while revenue increased 13%, supported by a 6% increase in average selling prices, Newman said. Volume growth slowed from 14% in July.

Newman's new figures show the iPhone 17 cycle remains robust. The lineup sold about 174 million units in the 12 months through August, roughly 18% more than the previous model over the same period.

China provided a stronger result, with launch-week sales of the new Pro models rising 12%. India's first three days of sales jumped 19%, while early demand appeared softer in Japan, South Korea and the United Arab Emirates.

Newman said Apple's fourth-quarter shipments tracked modestly below historical patterns through August. Combined July and August shipments totaled 33 million units, 57% of the quarter's consensus forecast of 58.2 million, versus a historical average of 60%.

The delayed launch of the base iPhone 18 until spring 2027 will certainly weigh on volume. MacRumors also reported potential iPhone Duo launch delays due to production woes. A greater proportion of premium models at higher prices due to a chip shortage has weighed on consumer demand, but that demand may return next year when the base model debuts.

Newman noted of the US market, "We expect robust demand for the DUO, which opens for pre-order on Oct 16, and ships Oct 23; early hands-on reviews are largely positive, and Counterpoint estimated ~6mn units to be sold in 2026, supply permitting."

Newman adds more color:

For the rest of Apple's supply chain: the late shipment of iPhone Duo and delayed launch of iPhone 18 base model weighed on near-term demand for Apple suppliers such as Largan. 

However, the Apple supply chain continues to outperform the Android ecosystem, and we believe the upcoming product cycles, including the iPhone 18 launch in 1H27 and the 20th-anniversary iPhone lineup in 2H27, should sustain investor sentiment and underpin valuations. 

Newman maintained his "Outperform" rating on Apple and a 12-month price target of $370, citing the strength of the existing iPhone cycle and upcoming product launches.

Among Wall Street analysts tracked by Bloomberg, 58% (about 33 analysts) rate Apple a "Buy," 30% (about 17 analysts) rate it "Neutral," and six rate it a "Sell." The average 12-month price target among the analysts tracked is around $334.

Jefferies and Bank of America analysts have also noted soft iPhone 18 demand in various major markets, as it appears that chip shortages pushing handset prices to unaffordable levels are weighing on consumer demand. Then again, there's also buy-now-pay-later, or, like many folks these days, consumers can take out longer-term loans for their phones.

Professional subscribers can read the full note here at our new Marketdesk.ai portal.