Apple, the world’s most valuable company, is projected to experience a 1.6% dip in total quarterly revenue, marking its sharpest decrease in third-quarter revenue since 2016, according to Refinitiv. This decline is expected to be driven by a decline in iPhone sales, which are anticipated to have dropped by over 2% during this period.
These projections come from a survey conducted by Visible Alpha, which involved 24 analysts. The decline in iPhone sales contrasts with the almost 3% increase seen during the same quarter last year and the 1.5% rise observed in the previous quarter (January-March).
While other prominent tech companies such as Meta Platforms (previously known as Facebook), Alphabet (the parent company of Google), and Microsoft have demonstrated resilience in their cloud-based operations and experienced a surge in digital ad sales, Apple seems to be facing some challenges. The upcoming quarterly report could deviate from the positive earnings trend seen in these companies.
Industry experts believe that Apple’s performance is impacted by general macroeconomic trends and expect the company to continue setting the pace for the smartphone industry for some time. The tech giant is projected to unveil the much-anticipated iPhone 15 in September, which could potentially feature the widely accepted USB-C port on certain models. Market experts suggest that this development might provide a slight boost to iPhone sales during the July-September quarter, although opinions on the overall performance during this period are mixed.
Although Apple has traditionally refrained from providing quarterly outlooks, analysts speculate that the company might shed light on its use of artificial intelligence (AI) to enhance its upcoming product lineup. This could offer insights into Apple’s innovative approach, as the company has avoided emphasizing buzzwords like AI in contrast to tech giants such as Alphabet and Microsoft. Bloomberg News recently reported that Apple has quietly built its own framework for creating large language models called Ajax.
Analyzing the anticipated iPhone sales weakness, experts predict that the decline will be mainly observed in the Americas, with revenue expected to decrease by 6%. In China, Apple’s third-largest market, sales are predicted to remain flat due to an uneven economic recovery. However, the company’s position in China remains solid, and any sales weakness could potentially be offset by strong sales momentum in India.
In summary, Apple’s Q3 revenue is expected to dip, primarily driven by a decline in iPhone sales. However, the company’s position in China and possible developments in the form of the iPhone 15 may partially mitigate the decline. As market experts eagerly anticipate Apple’s upcoming quarterly report, all eyes will be on the tech giant to see how it navigates these challenges and continues to innovate in the highly competitive smartphone industry.
