Apple is set to release its second-quarter earnings amid concerns over a slowdown in iPhone sales and challenges in China. The tech giant is expected to report a significant drop in iPhone shipments, with sales falling by 19% in the quarter, while Chinese rival Huawei continues to make gains after facing restrictions imposed by the U.S. government last year.
The decline in iPhone sales follows two consecutive quarters of revenue decreases in Greater China, a key market for Apple. Revenue for the quarter is projected to decrease by 28% year-over-year.
Apple’s stock has seen a 5% decrease year-to-date and has remained relatively flat over the past year. In contrast, competitors like Microsoft and Google have seen significant gains in their stock prices.
Analysts predict that Apple will report earnings per share (EPS) of $1.50 on revenue of $90.3 billion for the quarter, a 4.75% revenue decrease compared to the previous year. iPhone revenue is expected to drop by 10.8% to $45.75 billion, while iPad revenue is also set to fall by 11%.
Despite the challenges, there are some bright spots for Apple in the upcoming quarter. Services revenue is anticipated to grow by 11% year-over-year to $23.28 billion, and gross margin is expected to improve by 5% to 46.59%.
The company is also preparing for its Worldwide Developers Conference (WWDC) in June, where it will unveil updates to its operating systems and potentially integrate generative AI into its products. Apple has been investing in AI technology and has been acquiring AI firms to enhance its offerings.
Generative AI remains a niche product in the consumer market, but Apple has the opportunity to capitalize on this technology to drive future sales. The company is working with industry partners to strengthen its AI capabilities and enhance its product offerings.
As Apple braces for its second-quarter earnings report, investors await to see how the tech giant navigates the challenges in China and leverages opportunities in the AI space to drive growth.
