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People look at the iPhone 15 and other Apple products at a flagship store in Beijing, China, in September 2023.
CNN
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While Apple has silenced critics and overcome existential crises before, some fans of its minimalist products and investors in its maximalist stocks are nervous.
Apple will report its second-quarter earnings after the bell on Thursday. The figures come as the company continues to grapple with growth challenges, partly due to a sales slowdown in China and a customer base seemingly less interested in upgrading to its latest iPhone range.
Analysts expect low sales figures for the quarter ending March 31 – despite the company beating expectations in the past four quarters.
This will be the first earnings report since the launch of its biggest new product in years, the $3,499 mixed reality Vision Pro headset. According to a recent analysis, Apple spent approximately $100 billion on research and development on the device.
The headset was launched at a time when the Extended Reality (XR) market – a category that includes augmented, virtual and mixed reality – has reached a plateau with little adoption by mainstream consumers. The Vision Pro had a limited number of apps, but the experience is unparalleled when it comes to watching immersive videos and interacting with the world around you, with buy-ins already from Hollywood studios and game developers.
Yet it is an expensive computer that you wear on your face.
Recently, Apple analyst Ming-Chi Kuo posted an updated forecast for the headset, stating that production would be cut by several hundred thousand units.
While it’s unlikely that Apple will reveal a specific number of headsets sold in the last quarter, Apple can provide a general update on how it’s performing.
The company has lost momentum in China in particular, as nationalism, a rough economy and increased competition have hurt Apple in recent months. Market research firm IDC said Apple’s smartphone sales fell by as much as 10% globally in the first quarter of this year.
Chinese manufacturers, including Huawei and Xiaomi, have also made notable gains as consumers who had once considered Apple are now turning to national brands in China.
“It’s a steep decline for Apple, but considering where we’ve been over the last four years, Apple has probably been the most resilient brand, overcoming supply chain issues and macro challenges better than other brands,” says Nabila Popal, research director at IDC, told CNN at the time.
Samsung has also been the largest smartphone manufacturer for the past twelve years. Although Apple took the crown last year, its time at the top lasted only a quarter. Samsung has since regained its position, reports IDC.
The company’s stock price is down more than 8% to less than $170 per share in 2024, after reaching nearly $200 per share at various times over the past year. The company has overcome obstacles and threats many times over and has reached a market capitalization of $2.6 trillion, making it one of the largest and most powerful companies in the world.
The company could soon boost revenue growth, according to David McQueen, research director at technology intelligence firm ABI Research.
“It (could) create a ‘super cycle’ if it rolls out generative AI features in its upcoming products, despite being “a little late to the generative AI party,” he told CNN.
Apple has yet to send a strong signal on artificial intelligence, at a time when many tech companies are doubling down on related strategies and features. But rumors indicate that the company will introduce new AI-powered tools at its annual Worldwide Developers Conference in June.
The company is also reportedly in talks with ChatGPT maker OpenAI to power an iPhone chatbot.
Apple will hold a press event next week where it is largely expected to introduce updates to its iPad range and related accessories. It’s unclear whether the next-generation iPadOS software, which will also be unveiled in June, will also include AI-powered tools.