Apple expected to report biggest quarterly revenue decline in more than a year

Apple’s plans to catch up to rivals in generative AI and revive sagging sales in the Chinese smartphone market will be in focus on Thursday, when the Mac maker is expected to report its biggest quarterly revenue decline in more than a year.
Yuvraj Malik for Reuters:
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Long considered a must-own stock on Wall Street, Apple shares have underperformed other Big Tech companies in recent months, falling more than 10% year to date as fears mount about its slow roll out of AI services and as a resurgent Huawei takes market share in China.
Analysts on average see iPhone sales, which account for about half of Apple’s revenue, falling 10.4% in the first three months of 2024, according to LSEG. That drop would be the steepest in more than three years.
Analysts estimate Apple’s total revenue declined 5% in its second quarter, which included January through March. That would be Apple’s biggest revenue decline since the December-quarter of 2022, when revenue fell 5.5%.
Apple earlier this year lost the crown of the world’s most valuable company to Microsoft and its market value now stands at $2.68 trillion after the decline in its share price in 2024.
The company is in talks with OpenAI and Alphabet-owned Google to add GenAI features for the iPhone that could be unveiled at what is expected to be its biggest-ever annual developer conference in June, Bloomberg News has reported.
The rest of the company’s hardware business is also reeling from soft demand, with iPads and Mac sales expected to fall 11.4% and 4.3%, respectively, in the March quarter.

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MacDailyNews Take: Tim Cook’s Apple so far in 2024 is firing on as many cylinders as an Apple Car.
As we wrote in early April:
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Recap: Apple was caught flat-footed, due to a lack of vision on the part of leadership. They were, uh, focused elsewhere. Apple’s traditional data center network is not fit for generative AI. It will take years and billions of dollars to catch up just to where GenAI leaders (OpenAI, Microsoft, Alphabet, etc.) are today.
So, the only solution is to partner with a [Google, OpenAI, Baidu, etc.] for the real GenAI stuff while pretending (marketing) really hard that some on-device AI Apple has whipped up in a few months is “insanely great Apple innovation” that’s at the heart of Apple’s 2024’s AI announcements when it’s really just an adjunct… Watch Apple make a big show of its on-device AI at WWDC and run many ads touting it from June onwards.
Apple hopes to buy time for the data center buildouts and investments that will be required for them to someday own their own AI technology and not have to license it from the likes of [Google, OpenAI, Baidu, etc.].
This is what happens after a decade plus with a caretaker CEO at the helm after he hits the last page of his iteration playbook, yet attempts to stay in the game for too long.
See also:
• Work on Apple Vision Pro began under Steve Jobs – August 23, 2023
• Contrary to popular belief, Steve Jobs knew about Apple Watch – February 13, 2023

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