apple-sales-drop-as-investors-await-ai-upgrade-in-iphones

As Apple Inc.prepares to announce its strategy of incorporating generative AI into its iPhones, investors brace for what could be the tech giant's largest quarterly revenue dip in over a year.

 

 With a keen eye on reviving slowing sales, particularly in the critical Chinese market, Apple's upcoming quarterly report is poised to shed light on its performance amidst mounting competition and concerns over AI integration delays.

 

Apple has faced a sluggish trajectory in recent months, with its shares lagging behind other Big Tech counterparts, experiencing a more than 10% decline since the beginning of the year.

 

Factors contributing to this downturn include apprehensions surrounding Apple's delayed rollout of artificial intelligence services, coupled with the resurgence of competitors like Huawei (HWT.UL) encroaching on market share, particularly in China.

 

Analysts project a significant downturn in iPhone sales, which typically contribute roughly half of Apple's revenue, anticipating a notable 10.4% decline in the first quarter of 2024, according to LSEG.

 

This projected drop would mark the most substantial decrease in iPhone sales in over three years, compounded by a challenging comparison to last year's figures, which were buoyed by pent-up demand following the COVID-19 pandemic.

 

Despite Apple executives attributing part of last year's robust iPhone revenue to the mitigation of disruptions from pandemic-induced lockdowns in China, market expectations persist for a downward trend in iPhone sales, alongside an estimated 5% decline in total revenue for the fiscal second quarter ending in March.

 

Such a downturn would constitute Apple's most substantial revenue decline since the end of 2022.

 

Struggling with weakening revenue and a slip in market valuation, losing its title as the world's most valuable company to Microsoft, Apple seeks to rejuvenate its flagship device after a prolonged period without significant upgrades.

 

In pursuit of this goal, the tech giant is reportedly in discussions with OpenAI and Google-owned Alphabet to integrate genAI features into the iPhone, with expectations mounting for a potential unveiling at the upcoming annual developer conference in June.

 

While major tech rivals like Microsoft, Alphabet, and Meta Platforms have openly articulated their AI strategies in recent quarters, Apple CEO Tim Cook has maintained a more reserved stance on the topic.