iPhone sales slow down: Apple to see sharpest fall in revenue since 2016 as analysts stress on AI to boost growth

Apple is expected to witness a decline in iPhone sales during the April-June quarter, attributed to cautious consumer behaviour in a slow economy as the launch of a new model is anticipated. As the tech giant prepares to release its earnings report, analysts emphasise the significance of revealing its utilisation of artificial intelligence (AI) to boost growth.

Apple, the world’s most valuable company, is projected to experience a 1.6% dip in total quarterly revenue, which would mark its sharpest decrease in third-quarter revenue since 2016, according to Refinitiv.

Specifically, iPhone sales are anticipated to have declined by over 2% during this period, based on a survey of 24 analysts conducted by Visible Alpha. This contrasts with a nearly 3% increase in sales during the same quarter last year and a 1.5% rise in the preceding quarter (January-March).

The upcoming quarterly report may serve as a deviation from the positive earnings trend observed in other prominent tech companies such as Meta Platforms (formerly Facebook), Alphabet (Google’s parent company) and Microsoft. These companies have demonstrated resilience in their cloud-based operations and have witnessed a surge in digital ad sales.

“Apple is not immune to general macroeconomic trends and will continue to set the pace (for the smartphone industry) for quite some time,” Reuters quoted Bob O’Donnell, founder of TECHnalysis Research, as saying.

In September, analysts anticipate the unveiling of the much-anticipated iPhone 15, which could feature the widely accepted USB-C port on certain models. This development may provide a slight boost to iPhone sales during the July-September quarter, according to market experts, who have differing opinions on the overall performance during this period.

Notably, Apple has a tradition of not providing quarterly outlooks. However, industry analysts speculate that the tech giant might shed light on its utilisation of AI to enhance the upcoming product lineup, offering insights into the company’s innovative approach.

The company has so far avoided buzzwords like AI at its events, in a contrast with tech giants including Alphabet and Microsoft. Last month, Bloomberg News reported Apple has quietly built its own framework to create large language models known as “Ajax”.

Analysts predict that iPhone sales weakness will mainly come from the Americas, with revenue expected to decline by 6%. Sales in China, Apple’s third-largest market, are predicted to remain flat due to an uneven economic recovery., Reuters added.

However, Apple’s position in China is solid, and the company is likely to see only a small decline in iPhone sales. Any sales weakness in China could be offset by strong sales momentum in India.

(With Reuters inputs)