Apple under Scrutiny: New iPhones Create Excitement Among Investors

Apple is set to report its largest quarterly revenue in two years, driven by strong iPhone sales, particularly in China. These figures provide an early glimpse into how the recently launched iPhone 16 has been received in the market, just in time for the end of Apple's fourth fiscal quarter. However, investors are focusing on management's statements regarding first-quarter performance. Especially as Apple's launch, lacking an AI-driven super-cycle and featuring only Touch ID, might initially disappoint, speculation about future developments remains intriguing. With competitors such as Samsung and Microsoft close on its heels, Apple aims to capitalize on the generative AI trend. Toni Sacconaghi, an analyst at Bernstein, emphasizes that the strength of the iPhone 16 cycle is crucial for the December quarter and the fiscal year 2025. Even though Apple is optimistic about the iPhone 16 and Apple Intelligence, these factors do not guarantee assured success in this cycle. Apple initiated a limited rollout of new features for English-speaking users in the U.S. after the iPhone 16 launched. Apple Intelligence will not be available in key markets like Europe and China for the time being. This gap is evident as Apple faces heightened competition from a resurgent Huawei and other domestic brands such as Vivo, Xiaomi, and Honor. There are concerns that customers might delay their purchases, potentially postponing the much-needed sales boost during the holiday season. According to LSEG, iPhone sales in the September quarter could rise by 3.8%, thus halting a two-quarter decline.