Tech titan Apple is gearing up to unveil its latest quarterly earnings on Thursday, but all eyes are on the company's ambitious artificial intelligence (AI) plans. As iPhone sales continue to slump, especially in the crucial Chinese market, Apple is pinning its hopes on generative AI to revive its flagship product and reignite sagging sales.
Once a surefire bet on Wall Street, Apple shares have
stumbled this year, underperforming Big Tech peers like Microsoft and Google. A
10% stock slide reflects growing concerns over Apple's sluggish AI rollout and
dwindling Chinese market share, where rivals like Huawei are staging a fierce
comeback.
Analysts forecast a 10.4% plunge in iPhone revenue for the
first three months of 2024 - the steepest drop in over three years. While some
of this slump can be attributed to supply chain snags from China's COVID
lockdowns a year ago, the numbers still point to an overall iPhone sales
decline.
But Apple isn't taking this lying down. The tech behemoth is
in active talks with AI pioneers OpenAI and Google to integrate cutting-edge
generative AI capabilities into future iPhone models. These AI-powered features
could be the star attraction at Apple's annual developers conference in June,
setting the stage for a major iPhone reboot in September.
Analysts Believe AI Upgrade Could Reignite Consumer Demand
Analysts believe this AI upgrade could be the spark that
reignites consumer demand for iPhones, which have seen few groundbreaking
improvements in recent years. An AI edge may also help Apple claw back market
share from Huawei and Samsung, whose AI-enhanced smartphones recently dethroned
the iPhone as the world's top seller.
But AI is just one part of Apple's comeback playbook. The
company is expected to share updates on its stock buyback program and the
highly-anticipated Vision Pro mixed-reality headset, Apple's first major new
product category since the Apple Watch. While initial interest was high, there
are rumblings that Vision Pro demand is cooling faster than expected.
Beyond iPhones and headsets, Apple's other hardware lines
like iPads and Macs are also reeling from weak sales. But the services
division, encompassing the App Store and subscriptions, remains a bright spot
with projected 7.7% revenue growth.
CEO Tim Cook's Vision
As Apple gears up for this pivotal earnings call, all eyes
are on CEO Tim Cook's vision for seamlessly blending generative AI into iPhones
and other products. With its Silicon Valley dominance on the line, Apple is
betting big that an AI-infused reboot can halt the iPhone's sales skid and
cement its tech supremacy for years to come.
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