Analysts expect the new AI features to help reinvigorate iPhone sales

Analysts expect the new AI features to help reinvigorate iPhone sales is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Apple’s iPhone revenue fell for the second consecutive quarter, with a nearly 1% decline from the prior year to about $39.3 billion.
• Although iPhone sales have lagged, many investors remain optimistic about the company’s prospects in the next year, believing the company’s AI plans will spark a rally.

OUR TAKE
The decline in iPhone sales is significant because the iPhone is a major revenue driver for Apple, and any sustained drop can impact the company’s overall financial health and market position. So Apple’s AI strategy and its impact on iPhone sales are crucial for the company’s revenue, competitive position and overall technological advancements.
-Lia XU, BTW reporter

What happened

Apple’s iPhone revenue fell for the second consecutive quarter, with a nearly 1% decline from the prior year to about $39.3 billion, beating Wall Street expectations. However, many investors remain optimistic about the company’s prospects in the next year and believe the company’s AI plans will spark a rally.

Apple has been trying to catch up to rivals in the artificial intelligence arms race, unveiling an array of new AI tools in june like Apple Intelligence, its system for deeply embedding generative artificial intelligence features into its operating system and improving siri voice assistant. And investors hope will encourage users to upgrade their iPhones.

Analysts expect the new AI features to help reinvigorate iPhone sales, which will only be available to the iPhone 15 Pro, the company’s most premium iPhone model, expected to be released in september.

Also read: Apple unveils training details of Apple Intelligence models

Also read: Apple releases iOS 18.1 and macOS 15.1 betas with AI features

Why it’s important

The company’s services unit, which includes App Store revenue and streaming services, provided a cushion for declining iPhone sales, with sales increasing by more than 14% to $24.2 billion. This diversification is important for Apple’s financial stability, but the success of the iPhone remains crucial for the company’s overall performance.

These advancements like new AI tools are important for keeping Apple’s technology ecosystem competitive and attractive to users, which in turn supports hardware sales like the iPhone. And Apple’s AI strategy has come at a far lower cost compared with peers but it depends significantly on whether customers will be convinced to buy new phones, making it a cost-effective yet risky approach.

But they said many Apple customers are due for an iPhone upgrade, with 2021 being a strong year for iPhone purchases, and the introduction of new AI features could provide a compelling reason for these customers to upgrade.