Apple’s latest iPhone lineup is under significant scrutiny as it aims to strengthen its presence in the artificial intelligence space. As the company prepares to report its fiscal fourth-quarter earnings, analysts are closely monitoring iPhone 16 demand amid signs of a slower upgrade cycle.
Reports from U.S. carriers such as AT&T, Verizon, and T-Mobile show a 9% drop in upgrade rates, sparking concerns that the new iPhone may not be selling as briskly as expected. This is further complicated by Apple’s phased rollout of generative AI capabilities, which only began after the iPhone 16’s launch. Some analysts suggest this staggered approach to AI features might delay customer adoption.
The pressure on iPhone sales also impacts Apple’s stock performance. Since the iPhone 16 launch, Apple’s stock has risen less than 5%, lagging behind other major tech companies. Analysts point out that while Apple’s rivals can deploy AI capabilities widely without a high price tag, Apple’s hardware-centric model relies on its premium devices to deliver AI features, which are limited to the iPhone 15 and 16 models. As smartphone AI capabilities remain constrained by current hardware limitations, some analysts argue that it’s premature to expect a significant uptick in iPhone upgrades purely due to AI advancements.
Despite these challenges, Apple’s stock is still up nearly 36% over the past year, outpacing competitors like Microsoft and Google. While analysts anticipate modest revenue growth for the December quarter, they remain watchful for signs that Apple could adjust its production plans if demand falls short. Although demand indicators for the iPhone 16 are mixed, some experts maintain that Apple is well-positioned to capitalize on the rise of edge AI over the next year.
via @wsj
video @cnbc
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