Analysts said Apple is likely to report a decline in iPhone sales in the April-June quarter as buyers look for new models in a slowing economy, making it important for the company to detail how it plans to boost growth. How is artificial intelligence being used for.
The world’s most valuable company will miss Big Tech earnings on Thursday, with overall quarterly revenue expected to decline 1.6 percent — the steepest decline in third-quarter revenue since 2016, according to Refinitiv.
According to 24 analysts surveyed by Visible Alpha, iPhone sales are likely to decline by more than 2 percent in the period, compared with growth of about 3 percent a year ago and 1.5 percent growth in the quarter ending in March. Had happened.
The quarterly report may mark a break from an upbeat earnings season for companies like Meta Platform, Alphabet and Microsoft, which have shown resiliency in their cloud businesses and an uptick in digital ad sales.
“Apple is not insulated from general macroeconomic trends and will continue to set the pace (for the smartphone industry) for quite some time,” said Bob O’Donnell, founder of Technalysis Research.
With details about the new iPhone 15 coming next month — which may have a more universally accepted USB-C port on some models — iPhone sales may decline slightly in the July-September quarter, analysts said, who have predicted a mixed set of results for the period.
Apple doesn’t traditionally provide a quarterly outlook, but analysts expect the company to elaborate on how it’s using AI to improve its upcoming products.
Unlike tech giants including Alphabet and Microsoft, the company has so far avoided buzzwords like AI at its events. Last month, Bloomberg News reported that Apple had quietly created its own framework for building large language models, known as “Ajax.”
“We expect the updated comments to focus on Apple’s AI aspirations,” Wells Fargo analysts wrote in a research note. He said any commentary around technology could boost the stock.
Apple shares have risen more than 50 percent so far this year, while the tech-heavy Nasdaq Composite has gained nearly 37 percent.
iPhone slow
Much of the weakness in iPhone sales is expected to come from the United States, where revenue is expected to decline 6 percent, analysts said. Sales from China – Apple’s third-largest market – are expected to remain flat due to an uneven economic recovery, although the company has performed better than Android rivals in the country.
According to market research firm International Data, total smartphone shipments in China declined by 2.1 percent in the second quarter.
Piper Sandler said, “Most investors believe China’s soft stance could pose a risk to the data and further commentary, but Apple’s position in China remains strong and the company is expected to see a modest decline in iPhone sales.” Can get.” Analysts said.
“If there is any weakness in sales from China, it is likely to be easily offset by the strong sales momentum in India,” he said.
Mac and iPad sales are expected to decline 10.6 percent and 11.2 percent, respectively, according to Refinitiv data.
But the services business — home to Apple’s App Store and audio and video streaming services — could be a bright spot because of the booming advertising market, some analysts said.
This business, which accounts for about a quarter of Apple’s total revenue, is expected to grow 5.7 percent as it also benefits from price increases for iCloud subscriptions, although the pace is broadly the same as the previous three quarters.
© Thomson Reuters 2023
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
