iPhone Air May Not Be The Flop People Think It Is

Over the past few weeks, we've seen a steady stream of reports suggesting that Apple's ultra-thin iPhone Air hasn't exactly been flying off the shelves. Just last week, for example, a report emerged claiming that Apple was planning to scale back iPhone Air production by as much as 1 million units due to lower than anticipated demand. Consequently, a narrative was starting to build that Apple's iPhone Air, despite the hype we saw preceding its release, might go down as a disappointment, similar to Apple's beloved yet commercially unsuccessful iPhone mini.

A more recent report, however, claims that the iPhone Air may not be a flop at all. A new investor note from TD Cowen, brought to light by AppleInsider, relays that Apple never made a change to its iPhone Air production schedule. TD Cowen adds that iPhone Air production for the 2025 holiday quarter remains unchanged at 7 million units.

It's worth noting that analyzing the vibrancy of iPhone sales by looking at production numbers can often be misleading. For example, Apple will sometimes scale back production because initial sales estimates were overly optimistic, even when total sales remain quite strong. In other instances, Apple might boost production when initial sales estimates were too low. In both scenarios, Apple's actions often say more about the accuracy of its initial estimates than about the actual strength of overall sales. So, while production boosts or cutbacks can be informative, they typically don't paint a complete picture.

The popularity of the iPhone Air aside, one thing that is becoming increasingly clear is that Apple's iPhone 17 lineup is spearheading a significant uptick in iPhone sales. For years, analysts have anticipated an iPhone supercycle, and it appears that we're finally in the midst of it.

Demand for the iPhone 17 was immense right from the start. Not only were pre-orders higher than in years past, but demand has stayed strong in the weeks following its worldwide launch. One factor which is helping boost demand is the fact that some analysts believe there are more than 315 million iPhone users who haven't upgraded their device in at least four years. This, coupled with the fact that the iPhone 17 lineup arguably represents the strongest iPhone update we've seen in years, has seemingly created a perfect storm for Apple.

To this point, new data from Counterpoint Research reveals that the iPhone 17, in its first few weeks of availability, outpaced early iPhone 16 sales by a whopping 14%. That's a dramatic increase given that iPhone sales haven't fluctuated wildly in the last few years. Amid the apparent surge in iPhone sales, Apple's share price has recently skyrocketed to new highs. Shares of Apple on Monday reached $267, marking a new intraday high. Since August 5, Apple shares have shot up by 31%. We'll be able to get a better sense of how strong iPhone sales are when the company releases its earnings report for the recent quarter later this week.