While countless Wall Street banks try to one-up each other with ridiculous guesstimates on how many more new iPhones Apple's still to be released AI Siri will sell, not based on any fact-based evidence but on goalseeking "vibes" to justify their ridiculous price targets, one independent analyst has demonstrated a proven track record of being accurate time and again, and as such his calls have an outlier impact on the stock.

We are talking about TF International Securities' Apple-watcher Ming-Chi Kuo, and the reason why AAPL just dumped to session lows is because according to Kuo, iPhone 16 orders were cut by around 10 million units for 4Q24–1H25, with most of the cuts affecting non-Pro models. As a result, iPhone 16 production for 2H24 is now estimated at 84 million units (down from around 88 million previously).

Following these cuts, total iPhone production for 4Q24, 1Q25, and 2Q25 is now forecast at around 80 million, 45 million, and 39 million units, respectively, all down YoY (vs. around 84 million, 48 million, and 41 million in 4Q23, 1Q24 and 2Q24, respectively).

Separately, iPhone SE4 mass production will start in December 2024, with projected production of around 8.6 million units from December 2024 to 1Q25.

Here is Kuo analysis and conclusions:

• Apple’s iPhone revenue in 4Q24 may not fully reflect the impact of production cuts, as the gap between production and sell-through in 4Q23 was larger than in 4Q24, and the product mix in 4Q24 is more favorable (with increased production of the Pro Max model for Sep-Oct). However, iPhone revenues are expected to come under pressure in 1H25 due to a YoY shipment decline and a less favorable product mix due to the launch of SE4.
• Most iPhone suppliers are expected to experience pressure from late 4Q24, with a more significant impact in 1H25.
• Some market participants are optimistic that Apple Intelligence could dramatically boost iPhone shipments soon. However, Apple’s recent order cuts suggest this optimistic expectation may not materialize in the short term. I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service. However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development.

The reaction in the stock price was immediate, and it is hitting both the Nasdaq and the broader market, especially with Nvidia also dumping today.