Apple is set to announce its largest quarterly revenue growth in two years on Thursday, October 31, as demand for iPhones has been strong, particularly in China.
According to a report by Reuters on Tuesday, this performance will provide investors with a report on the latest market demand for the iPhone 16 series, which was released by Apple before the end of the fourth quarter on September 20.
However, investors will be focused on executive comments for the first quarter, as they are concerned that the slow rollout of Apple Intelligence features could dampen expectations for the long-awaited AI-driven “super cycle” from Apple’s biggest buyers.
Apple is catching up in the field of artificial intelligence. Competitors such as Samsung Electronics with Android phones, as well as software rivals like Microsoft, are actively launching applications utilizing artificial intelligence.
Toni Sacconaghi, an analyst at the private wealth management firm Bernstein, stated: “The strength of the iPhone 16 cycle is the most important question heading into the December quarter and the fiscal year 2025.”
He added, “Investors should expect Apple to be optimistic about the iPhone 16 and Apple’s smart phone, but it may not necessarily reflect the ultimate success of the cycle.”
Following the launch of the iPhone 16 a few weeks ago, Apple started limited release of Apple Intelligence features to U.S. customers on Monday, October 28.
Currently, Apple Intelligence cannot be used on iPhones in major markets like Europe and China. The tech giant is facing pressure from domestic Chinese manufacturers such as Huawei, Vivo, Xiaomi, and Honor. Apple announced this week that it has rolled out some Apple Intelligence features to EU users on Mac computers and will release more features in April next year.
However, the limited rollout has raised concerns as customers might delay purchases from the crucial holiday season to next year, potentially delaying the sales boost from artificial intelligence.
According to analysts from the London Stock Exchange Group (LSEG), iPhone sales in the September quarter are expected to increase by 3.8%, breaking the declines of the previous two quarters.
Revenue from Greater China is projected to grow by 6.6%. Data from the International Data Corporation (IDC) shows that Apple became the second largest selling brand in the Chinese market in the three months leading to September, aided by price cuts and the launch of the iPhone 16 series.
IDC predicts that due to the launch of more powerful iPads, sales have increased by 23.7% in the first three months, with a forecasted growth of 10.1% this quarter, reaching $7.09 billion.
Service businesses including the App Store often outpace the growth of Apple devices, with sales expected to grow by 13.3%, slightly slower than the previous quarter.
In June, the EU antitrust regulatory agency accused Apple of violating EU tech laws, leading to more obstacles for Apple’s business. Apple’s performance in the fourth quarter will include a one-time tax expense of about $10 billion due to an unfavorable ruling on Apple’s tax case in Ireland by the European Court of Justice in September.