Apple Inc ( AAPL ) shares are trading lower Wednesday afternoon after an analyst reported that iPhone 16 orders were cut by around 10 million units.

What To Know: Apple ( AAPL ) analyst Ming-Chi Kuo released a report Wednesday afternoon suggesting that iPhone 16 orders were slashed by about 10 million units for the three-quarter period spanning the fourth quarter of 2024 through the first half of 2025.

The analyst said his latest industry survey showed that most of the cuts impact the non-Pro models. Given the cuts, Kuo expects iPhone 16 production in the second half of 2024 to total 84 million units, down from his prior forecast of around 88 million units.

Kuo also noted that iPhone SE4 production is slated to start in December. Production projections currently sit around 8.6 million units from launch to the end of the first quarter, he said.

“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),” the analyst said.

“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.”

See Also: Apple ( AAPL ) CEO Tim Cook Says Apple Intelligence Will Make Products ‘Profoundly Different’: New AI Technology Will Get Consumers ‘On A Different Technology Curve’

Kuo acknowledged that some are optimistic that Apple Intelligence could significantly boost iPhone shipments, but he suggested that order cuts show those expectations may not materialize in the short term.

“I believe that Apple ( AAPL ) 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,” Kuo said.

Separately, Bloomberg reported Wednesday that Apple ( AAPL ) and Goldman Sachs will have to pay over $89 million to settle an investigation into their credit card joint venture.

The Consumer Financial Protection Bureau reportedly said Apple ( AAPL ) and Goldman “illegally sidestepped” their legal obligations for Apple Card borrowers. The agency ordered Goldman to pay at least $19.8 million in redress, as well as a civil money penalty of $45 million. Apple ( AAPL ) has been ordered to pay a $25 million civil money penalty.

AAPL Price Action: Apple ( AAPL ) shares were down 2.88% at $229.03 at the time of publication, according to Benzinga Pro.