Apple Announces $46.2 Billion in Global iPhone Sales
- Apple’s AI just hit iPhones, but Wall Street isn’t convinced it’ll move the needle.
- Sales are up, AI is live – but will the holiday quarter deliver the growth Apple needs?
- A fresh Siri and ChatGPT integration are on the way – is it enough to keep Apple fans hooked?
Apple’s stock took a hit Friday morning as the company’s latest artificial intelligence initiatives, branded "Apple Intelligence," left investors questioning the potential impact on device sales.
Following Apple’s earnings call on October 31, which included cautious guidance for low-to-mid single digit revenue growth, shares dropped by about 2%. This projection fell short of some analysts’ expectations, who had anticipated growth upwards of 7% for the holiday quarter, according to The Financial Times.
Apple’s revenue for the latest quarter saw a modest rise of 6% year-over-year, edging past analysts' forecasts but not by the margin that might have reassured investors.
We're moving just as fast as possible while ensuring quality.— Apple CEO Tim Cook
Photo via Yahoo! Finance // Pictured: A graph showing Apple's quarterly revenue split by product category. Apple beat analysts earnings expectations this quarter, but not by enough to satisfy Wall Street.
AI Integration: Apple’s Strategy for iPhone 16 Series
The iPhone 16 lineup, specifically designed with advanced AI capabilities, went on sale with features tailored to enhance Siri and bolster user experiences across various applications. However, as Cook confirmed, the AI functions only became operational after a recent software update rolled out on October 28 for iPhones, iPads, and Macs.
The December update is expected to introduce further AI enhancements, including expanded language support, integration with OpenAI’s ChatGPT, and "more powerful writing tools," as Cook disclosed.
Luca Maestri, Apple’s CFO, shared with The Financial Times that the latest iPhone model had outpaced its predecessor in initial sales, with the new operating system showing an impressive adoption rate — downloaded at twice the rate of the previous version. He hinted that the AI features were instrumental in driving this early momentum, stating that the company anticipates continued growth as Apple expands its AI ecosystem.
Apple’s AI features “work,” argued Tony Fadell, a former Apple executive and founder of Nest, at the 2024 TechCrunch Disrupt conference. He defended Apple’s choice of a gradual rollout, stating that “you start building things that work, and you build on top of those and make better and better features.”
Competition in the AI Landscape
Despite Apple’s advances, competitors like Google, Microsoft, and OpenAI have already secured their places in the AI market. With products like Google’s Bard/Gemini and Microsoft’s integration of AI in Windows with Copilot, Apple’s entry may appear belated to some industry observers. However, the tech giant is clearly positioning its AI differently, favoring privacy-focused features embedded into its devices over grandiose AI models.
Cook emphasized Apple’s commitment to measured progress, asserting that the company’s approach focuses on reliability and privacy rather than flashy AI showcases.
Photo via Apple // The Apple iPhone 16 Pro with Apple Intelligence.
"Apple’s strategy may not dazzle as Google’s or OpenAI’s," noted Thomas Monteiro, an analyst from Investing.com. “This approach puts pressure on Apple to ‘do an overall better job to impress the public’ if it hopes to see a faster acceleration in iPhone sales.”
Quarterly Financial Snapshot: Revenue, Earnings, and Back Tax Impact
Apple’s earnings report offered a mixed financial picture:
- iPhone Sales: $46.22 billion for the quarter (July-September), reflecting a 6% increase from last year.
- Net Revenue: $94.93 billion, surpassing forecasts by about $400 million.
- Earnings per Share: $1.64 (excluding a one-time $10.2 billion charge due to an EU back-tax ruling).
Photo via AppleInsider // Zooming out: A graph showing Apple's quarterly revenue and net profit, from Q3 2015 to Q4 2024. Look at that growth!
This financial uptick signals a modest recovery after two consecutive quarters of iPhone sales declines. Analysts noted that the AI push could be a decisive factor in sustaining this momentum.
This is just the beginning of what we believe generative AI can do.— Tim Cook
AI Strategy’s Market Impact and Apple’s Future Prospects
Apple is banking on its AI-driven capabilities to encourage iPhone upgrades among current users, positioning the iPhone 16’s advanced features as a compelling incentive for consumers holding on to older models. The December rollout, Cook said, will expand AI functionality to include advanced features designed to appeal to a global audience, with added languages planned for early 2025.
The stakes are high as Apple joins the AI race alongside tech giants that have already committed to long-term investments in energy-intensive AI development. In contrast, Apple’s restrained approach minimizes power demands and integrates AI in ways that align with its brand ethos of privacy and usability.
The coming holiday quarter will test this strategy. Will Apple’s AI gamble pay off, or will it leave investors wanting more?
Recommended by the editors:
Thank you for visiting Apple Scoop! As a dedicated independent news organization, we strive to deliver the latest updates and in-depth journalism on everything Apple. Have insights or thoughts to share? Drop a comment below—our team actively engages with and responds to our community. Return to the home page.Published to Apple Scoop on 1st November, 2024.
No password required
A confirmation request will be delivered to the email address you provide. Once confirmed, your comment will be published. It's as simple as two clicks.
Your email address will not be published publicly. Additionally, we will not send you marketing emails unless you opt-in.