Analysts say Apple is likely to report lower iPhone sales in the April-June quarter as consumers hold on to new models amid the economic downturn, and the company must detail how it uses artificial intelligence to boost growth.
The world’s most valuable company will report big tech earnings on Thursday, with total quarterly revenue likely to fall 1.6%, the largest decline in third-quarter revenue since 2016, Refinitiv data showed.
A Visible Alpha survey of 24 analysts showed that iPhone sales may have fallen more than 2% in the period, compared with a nearly 3% increase in the same period last year and a 1.5% increase in the quarter ended in March.
The quarterly report could mark the breakout of an upbeat earnings season for companies like Meta Platforms, Alphabet and Microsoft, which have seen resilience in their cloud businesses and growth in digital ad sales.
“Apple is not immune to overall macroeconomic trends and will continue to lead the way (in the smartphone industry) for quite some time,” said Bob O’Donnell, founder of TECHnaanalysis Research. .”
Analysts said that with details of the new iPhone 15 expected to be released next month, some models may be equipped with the more commonly accepted USB-C port, iPhone sales may see a slight improvement in the July-September quarter, they predict the results A mixed bag of good and bad. during this period.
Apple traditionally does not provide a quarterly outlook, but analysts expect the company may detail how it will use artificial intelligence to improve upcoming products.
In contrast to tech giants such as Alphabet and Microsoft, the company has so far avoided using buzzwords such as artificial intelligence in its events. Last month, Bloomberg News reported that Apple had quietly built its own framework to create a large language model called “Ajax.”
“We expect Apple’s latest comments on its AI vision to take center stage,” Wells Fargo analysts wrote in a research note, adding that any comments surrounding the technology could boost the stock.
Apple shares are up more than 50% so far this year, while the tech-heavy Nasdaq Composite Index is up nearly 37%.
iPhone slows down
Analysts said most of the weak iPhone sales are expected to come from the Americas, where revenue is expected to fall 6%. Sales in China, Apple’s third-largest market, are expected to be flat despite an uneven economic recovery, although the company has performed better there than its Android rivals.
According to data from market research firm International Data, China’s smartphone shipments fell overall by 2.1% in the second quarter.
Piper Sandler said: “Most investors believe that weakness in China may pose a risk to the data and further comments, but Apple’s position in China is solid and the company’s iPhone sales may only show a small increase.” decline, if any,” analysts said.
“Any weakness in sales in China is likely to be easily offset by strong sales momentum in India,” they added.
According to Refinitiv data, Mac and iPad sales are expected to decline by 10.6% and 11.2% respectively.
But some analysts say the services business – home to Apple’s App Store and audio and video streaming services – could be a bright spot due to growth in the advertising market.
The business, which accounts for about a quarter of Apple’s total revenue, is expected to grow 5.7% as it also benefits from rising iCloud subscription prices, though at a roughly similar pace to the previous three quarters.
© Thomson Reuters 2023
(This story was not edited by NDTV staff and was automatically generated from syndicated feeds.)
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