Apple is gearing up for a substantial sales increase with the upcoming iPhone 16, anticipating an additional 10 million units sold compared to last year’s model. This expectation is backed by increased chip orders from TSMC and a slew of new AI features set to be integrated into the new iPhone lineup.
A recent supply-chain report from Chinese site CTEE reveals that Apple has significantly upped its order for A-series chips from TSMC. The company has requested between 90 million and 100 million chips for the iPhone 16, compared to last year’s 80 million to 90 million for the iPhone 15. This indicates a strong confidence in the iPhone 16’s market performance.
While some reports have suggested that Apple is unifying its chip strategy by giving all iPhone 16 models the same chip, this is more a matter of naming convention than actual chip equality. The base and Plus models of the iPhone 16 will be powered by a chip labeled A18, which is essentially a slightly updated version of the A17 Pro. Meanwhile, the Pro and Pro Max models will feature a new A18 Pro chip, boasting significant advancements in AI and graphics capabilities.
The standout feature driving this expected sales bump is Apple’s new AI capabilities. Branded as “Apple Intelligence,” these features will be a key selling point of the iPhone 16. Notably, only the iPhone 15 Pro and Pro Max from last year’s lineup will support these AI features. This creates a strong incentive for users of older models, including the iPhone 15 and 15 Plus, to upgrade to the iPhone 16 to benefit from the enhanced AI functionality.
The iPhone 16 series will feature significant technical upgrades. The entire lineup is expected to use TSMC’s second-generation 3-nanometer process, known as N3E, which leverages FinFlex technology to balance performance and power consumption. This results in a chip that is 15% to 20% larger for the Pro models, accommodating more AI and graphics processing units.
Additionally, the iPhone 16 models will see upgrades in lens and memory specifications, with 8GB of memory becoming the new standard across all four models. This is a critical enhancement, given the increased data processing demands of AI applications.
Apple’s aggressive chip ordering strategy is not just a sign of its confidence in the iPhone 16’s success but also a boon for its supply chain partners. TSMC, in particular, stands to benefit significantly, as Apple remains its largest customer, contributing a substantial portion of its revenue.
Other companies in Apple’s supply chain, including Largan, Yujingguang, Wenmao, and Acertech, are also expected to see positive impacts from the increased chip orders and the subsequent demand for new iPhone units.
With the iPhone 16, Apple is not just aiming for incremental sales growth but is banking on the transformative potential of AI to drive a major upgrade cycle. By enhancing its chip technology and integrating advanced AI features, Apple is setting the stage for what it expects to be a highly successful product launch. The anticipation of selling up to 100 million units underscores the company’s strategy and confidence in meeting and surpassing consumer expectations.
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