Apple’s plans to add generative AI to the iPhone and revive sluggish sales in the crucial Chinese market will come into focus Thursday. At this time, tech giant Apple is expected to report its biggest quarterly revenue decline in more than a year.
Apple shares, long considered a must-have stock on Wall Street, have underperformed other tech giants in recent months, falling 10% year to date as concerns grow over the slow rollout of AI services and a resurgent Huawei takes market share. It has fallen further. In China.
On average, analysts expect iPhone sales, which account for about half of Apple’s revenue, to decline 10.4% in the first three months of 2024, according to LSEG. The decline will be the steepest in more than three years.
Analysts estimate that Apple’s total sales fell 5% in the second quarter, which covers January through March. This would be Apple’s biggest revenue decline since the December 2022 quarter, when sales fell 5.5%.
Earlier this year, Apple lost its crown as the world’s most valuable company to Microsoft, and after its share price decline in 2024, Apple’s market value now stands at $2.68 trillion (roughly Rs. 2,23,68,017 crore).
Sluggish sales and falling stock prices are putting pressure on Apple to refresh its flagship devices after years without major upgrades.
Bloomberg News reports that the company is in talks with OpenAI and Alphabet-owned Google to add genAI features for the iPhone, which will be unveiled at its largest annual developer conference ever in June.
Analysts believe this AI integration could boost demand for the next iPhone series, which is expected to be announced in the fall.
While executives from Microsoft, Alphabet, Meta Platforms and other major technology companies have discussed AI strategies on quarterly conference calls in recent months, Apple CEO Tim Cook There was much less discussion about plans for emerging technologies.
Adding AI features to the iPhone could help Apple compete better with Huawei and Samsung Electronics, which took back the title of world’s leading smartphone vendor from Apple earlier this year thanks to demand for the AI features of its Galaxy S24 smartphone. there is.
Bernstein analyst Toni Sacconaghi this week lowered his rating on the company’s stock, saying “replacement cycle tailwinds and incremental generative AI capabilities position Apple well for a strong iPhone 16 cycle.” It was upgraded from ‘Market Performance’ to ‘Excellent’.
“We believe the weaknesses prevalent in China are cyclical rather than structural. Historically, Apple’s China operations have shown significantly higher volatility than Apple as a whole, given its highly functionally sensitive installed base.”
Thursday’s earnings will also be closely watched for updates on the company’s stock buyback plans and Vision Pro, Apple’s first major product released in February.
After the initial enthusiasm, there are signs that demand for the $3,500 device is slowing, with one analyst saying this month that Apple has withdrawn production estimates for its mixed reality headset.
The rest of the company’s hardware business is also suffering from reduced demand, with iPad and Mac sales expected to decline 11.4% and 4.3%, respectively, in the March quarter.
Apple has revealed that it is increasing its focus on devices that have been hampered by a lack of major upgrades.
The company will host an event later this month where its revamped iPad lineup will be unveiled, and press reports say it plans to update all Mac models with the faster, AI-focused M4 processor.
The services business, which includes revenue from the App Store and subscription services such as Apple TV, is expected to remain a bright spot with revenue growth of 7.7%.
© Thomson Reuters 2024
Apple launched the iPad Pro (2022) and iPad (2022) this week, along with the new Apple TV. Orbital, a Gadgets 360 podcast, discusses the company’s latest products with a review of the iPhone 14 Pro. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music, and wherever you get your podcasts.
Affiliate links may be generated automatically. Please see our Ethics Statement for more information.
