Apple is expected to report its largest quarterly revenue decline in over a year on Thursday due to slowing iPhone sales and increased competition in the Chinese market.
Analysts are highly anticipating the company’s plan to integrate generative AI into its iPhones, which could help it revive sales and compete with rivals like Huawei and Samsung Electronics.
LSEG predicts that iPhone sales, which comprise half of Apple’s revenue, will drop by 10.4% in the first three months of 2024.
________________________________________________________________________
- Apple expected to report biggest quarterly revenue decline in over a year, with iPhone sales falling 10.4%
- Investors await updates on Apple’s plan to integrate generative AI into iPhones to revive sagging sales.
- Apple faces increased competition from Huawei in China and Samsung Electronics in the global smartphone market.
________________________________________________________________________
Apple Faces Sales Decline as Investors Await AI Integration in iPhones
This would be the steepest decline in over three years, although last year’s iPhone revenue was unusually high due to pent-up demand following the COVID pandemic.
Despite this, Wall Street still expects a slight decline in iPhone sales and estimates that Apple’s total revenue declined by 5% in its fiscal second quarter that ended in March.
Apple’s market value currently stands at $2.68 trillion, losing the crown of the world’s most valuable company to Microsoft earlier this year.
The company’s shares have underperformed other Big Tech firms in recent months, falling over 10% this year over concerns about its slow rollout of artificial intelligence services and increased competition from Huawei in China.
To address these concerns, Apple is reportedly in talks with OpenAI and Alphabet-owned Google to add genAI features to the iPhone.
These features could be unveiled at the company’s upcoming annual developer conference in June.
Analysts believe such an AI integration could drive demand for the next iPhone series, which is expected to be announced in the fall.
In addition to updates on AI integration, investors will also be closely watching Thursday’s earnings for information on Apple’s stock buyback plan and the performance of the Vision Pro, the company’s first major product in years.
Initial enthusiasm for the $3,500 mixed-reality headset appears to have waned, with reports suggesting Apple has pulled back its production estimates.
The rest of Apple’s hardware business is also facing challenges, with iPads and Mac sales expected to fall 11.4% and 4.3%, respectively, in the March quarter.
However, the company has indicated its focus on these devices, with plans to unveil a revamped iPad lineup and update every Mac model with faster, AI-focused M4 processors.
Despite the challenges in its hardware business, Apple’s services segment, which includes the App Store and subscription services such as Apple TV, is expected to remain a bright spot with revenue growth of 7.7%.
As Apple prepares to report its quarterly earnings, investors will be watching closely for signs that the company is successfully navigating the challenges posed by slowing iPhone sales and increased competition in the Chinese market.
The integration of AI into its flagship devices could be a key factor in determining the company’s future success, and all eyes will be on Apple’s upcoming developer conference for further details on its plans.
Subscribe to our daily Newsletter.
Leave a Reply