Speculations are rife that Apple, the world’s most valuable firm, is likely to report a 1.6 per cent drop in total quarterly revenue, marking its steepest decline in third-quarter revenue since 2016.
This dip in revenue is primarily attributed to a projected fall of over 2 per cent in iPhone sales during the April-June quarter. The sluggish sales figures indicate that shoppers may have held out for a new iPhone model amid a slow economy, resulting in a departure from the upbeat earnings seen by other tech giants such as Meta Platforms, Alphabet and Microsoft.
The drop in iPhone sales is expected to be particularly notable in the Americas, where revenue is predicted to fall by 6 per cent. In China, Apple’s third-largest market, sales are forecasted to remain flat due to an uneven economic recovery. Nonetheless, the company has managed to outperform its Android rivals in the region.
With details about the upcoming iPhone 15 expected to be unveiled next month, analysts speculate that the July-September quarter could see a slight nudge in iPhone sales, particularly if the new models sport the more universally accepted USB-C port.
Amidst this slowdown in sales, analysts are keen to hear how Apple plans to navigate and augment growth, especially in light of the current economic conditions. Many analysts are hopeful that Apple will shed light on its utilization of artificial intelligence (AI) in its products. Unlike some tech giants that have been more vocal about their AI initiatives, Apple has thus far remained relatively quiet. However, recent reports suggest that the company has been secretly developing its framework for creating large language models known as “Ajax.”
The company’s services business, which encompasses the App Store and audio and video streaming services, may offer a bright spot. It is projected to grow by 5.7 per cent, buoyed by an uptick in the ad market and price increases for iCloud subscriptions. The services business accounts for roughly a quarter of Apple’s total revenue.
Apple has traditionally not provided a quarterly outlook, but analysts believe the company might take the opportunity to elaborate on its AI aspirations and how it intends to leverage AI to improve its upcoming products. Such commentary could potentially have a positive impact on the company’s stock, which has already seen remarkable gains of over 50 per cent so far this year, outperforming the tech-heavy Nasdaq Composite index.
(Inputs from Reuters)