Apple is set to report slow revenue growth as weak iPhone demand, AI delays, and tough China competition weigh on sales, while a strong U.S. dollar adds further pressure.
Apple is anticipated to report modest revenue growth for its fiscal first quarter on Thursday, January 30, as adoption of artificial intelligence features and increasing competition from Chinese smartphone makers have impacted iPhone sales during the key holiday season.
Tech giants like Apple, Google, and Samsung have been leveraging AI to boost device sales. However, Apple's iPhone 16 series, launched in September, lacked AI-driven features at release, with enhancements such as an upgraded Siri expected to roll out later this year in select regions.
Apple’s AI struggles were underscored earlier this month when it was forced to withdraw an AI-powered news summarization tool due to inaccurate headlines, drawing criticism from media outlets.
Facing renewed competition from Huawei and other Chinese manufacturers, Apple’s global smartphone market share shrank to 23% in the last quarter of 2024, down from nearly 25% a year prior, according to IDC data. The decline was even more pronounced in China—Apple’s third-largest market—where its market share dropped by 10 percentage points to 17%.
Although the Chinese government has introduced subsidies to encourage smartphone purchases, these incentives primarily target low- to mid-range devices priced below $800, excluding Apple's premium iPhones, according to Barclays analysts.
Concerns over weakening iPhone demand have weighed on Apple’s stock, which has declined by 5% in January. Analysts project the company will report revenue growth of 3.8% for the quarter ending in December, based on LSEG data—significantly lower than the 6.1% growth recorded in the previous quarter, which only briefly included sales of the new iPhone model.
iPhone sales are expected to grow by 1.9% in the first quarter, a slowdown from the 5.5% rise in the preceding quarter. Mac sales are forecast to increase by 2.3%, slightly outpacing the prior quarter, while iPad revenue is projected to climb 4.2%, though at a slower rate than in the fourth quarter.
Apple’s services division, which has been a key driver of revenue growth in recent years, is expected to see a 12.9% increase in sales.
Like other multinational companies, Apple is also facing the effects of a stronger U.S. dollar. The dollar appreciated nearly 8% in the final quarter of 2024 amid expectations of trade tariffs under President Donald Trump’s administration.
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