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While it would seem a little early to be judging poor demand for Apple's new iPhone 14 line-up, Apple analyst Ming-Chi Kuo has weighed in negatively this morning regarding the standard iPhone 14. Our report provides you Kuo's "Survey and Analysis," results and "Conclusion."  

Survey and Analysis

• The delivery time of more than four weeks may reflect good demand. The delivery time for iPhone 14 Pro Max and 14 Pro is longer than four weeks (Pro Max/Pro to be about six/five weeks).
• iPhone 14 and 14 Plus will be in stock on launch day, reflecting lackluster demand. As it stands now, the pre-order result for iPhone 14 and 14 Plus is worse than iPhone SE 3 and iPhone 13 mini (SE 3 and 13 mini both suffering from an order cut in 1H22).
• The iPhone 14 Plus is the replacement for the iPhone 13 mini. However, this new product’s pre-order result is significantly lower than expected, meaning Apple’s product segmentation strategy for standard models failed this year.
• The delivery time of iPhone 14 Pro Max/14 Pro is slightly longer/about the same vs. 13 Pro Max/13 Pro, and that of iPhone 14/14 Plus models is shorter vs. iPhone 13/13 mini.
• No doubt, the pre-order result for Pro models proves again that Apple still has numerous loyal and sticky customers amid the deteriorating economy, but it doesn’t mean Apple will increase orders of Pro models at once. Whether Apple will increase Pro orders depends on how long the strong demand for Pro models can last amid the recession.
• Apple may cut iPhone 14 and 14 Plus shipment forecasts for November and beyond within a few weeks if the demand for the iPhone 14 and 14 Plus doesn’t improve after the launch.
• Based on the current pre-order result, strong demand for the iPhone 14 Pro models will likely last until at least November. But suppose Apple doesn’t increase iPhone Pro orders afterward. In that case, the potential order cut of iPhone 14 and 14 Plus could offset Apple’s revenue growth from a better iPhone product mix (iPhone ASP increase) in late 4Q22 or 1Q23.
• Suggest investors watch Pro models’ major beneficiaries recently, who may beat seasonality in 1Q23 thanks to more shipment allocation of Pro models and higher component prices. Revenue from the iPhone business will likely start to decline significantly in September or October for suppliers who are not the major beneficiaries of Pro models.

Conclusion

• Versus the iPhone 13 series, pre-order results of iPhone 14 Pro Max, Pro, and two standard models are good, neutral, and bad, respectively.
• Though the iPhone 14 series product mix improves and iPhone 14 Pro Max pre-order is better vs. iPhone 13 Pro Max, the pre-order result is currently neutral to Apple. It’s unclear whether Apple will increase the Pro models shipment forecast, but the likelihood of iPhone 14 and 14 Plus (accounting for about 45% of the overall iPhone 14 shipments) cutting orders is growing.
• Suggest investors watch Pro models’ major beneficiaries recently, who may beat seasonality in 1Q23 thanks to more shipment allocation of Pro models and higher component prices. Revenue from the iPhone business will likely start to decline significantly in September or October for suppliers who are not the major beneficiaries of Pro models.

While there's been some negative feedback about the standard iPhone 14's lack of innovation, especially from Steve Jobs daughter (as seen in her Tweet below), the criticism is a little harsh.

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The standard iPhone 14 offers a round of upgrades from the new 6.7" display model, an upgraded A15  chip with improved GPU for better gaming and subtle upgrades for face and rear cameras and more. If you happen to need a new iPhone from you iPhone 11 or 12, the iPhone 14 offers a decent upgrade.

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If consumers feel that the standard iPhone 14 doesn't offer enough, then for a mere $200 extra they could easily upgrade to the iPhone 14 Pro model that offers a notable physical screen change with its new Dynamic Island replacing the static notch, the faster A16 processor, a superior display and much more.

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At the end of the day, will Ming-Chi Kuo's analysis that "Apple’s product segmentation strategy for standard models failed this year" prove to be true, or will his survey prove to have been premature?  While only time will tell, it's clear that Apple has strategically nudged their fan base to make the push to at least their Pro model and the survey may be reflecting that. Though in that context, it's not seen as a failure, as Kuo views it, but rather a successful strategy to push more of their base to the premium space.