The Zhitong Finance App notes that John Tenus will host his first earnings call since becoming the CEO of Apple (AAPL.US) on Monday. Investors will pay attention to the company's performance guidelines to determine whether a round of intensive launches of new products can help offset the rise in memory chip costs.
Tenus took over Shuai Yin from Tim Cook in September and has hosted the launch of Apple's first folding screen phone, smart home hub, and Apple's first touchscreen laptop. All of these products began shipping in the first quarter of the company's current fiscal year, at a time when Cook called the “once-in-a-century flood” of rising storage costs.
Apple will face scrutiny on three key issues: the critical holiday season earnings outlook, Tenus' statement on AI and the new Siri, and analysts' expectations that will drag down quarterly profit growth to the weakest increase in memory chip costs in six quarters.
Apple has been trying to differentiate its AI products from competitors such as Meta (META.US)'s Muse smart device, which has been gaining momentum in app store rankings in recent weeks.
Apple is suing rivals such as OpenAI for stealing trade secrets, and is also developing hardware designed to replace iPhones as core devices in people's lives. How Apple embraces AI may also have a major impact on the future of its service business. The growth rate of this business has slowed after years of rapid expansion, causing investors to worry.
Dan Morgan, portfolio manager of Synovus Trust, which owns Apple shares, said, “Recent smart device innovations far surpass our experience with Siri AI, but Apple has acknowledged that Siri AI... is more focused on trust and privacy.”
Apple is marketing its AI systems to “ordinary people” rather than Silicon Valley industry insiders, who are heavy users of cutting-edge AI models such as OpenAI.
Morgan added that investors want to know if Apple can distribute third-party AI agents through its app store and profit from the business they generate.
The stock price outperformed the market
As it stands, Apple's reluctance to join large-scale AI money-burning contests is beneficial to it. Its stock price has risen about 27% this year, outperforming tech giants such as Microsoft (MSFT.US), Alphabet (GOOGL.US), Meta, and Amazon (AMZN.US), as investors seek to avoid concerns about the increasing cost of AI infrastructure construction.
According to LSEG data, analysts expect Apple to report a revenue increase of nearly 11% in the July-September quarter (the fourth quarter of the company's fiscal year) to US$113.39 billion. Net profit is expected to increase by approximately 6% to $29.04 billion.
Apple's service business is expected to grow by nearly 10% to US$31.56 billion, the slowest growth rate in more than three years.
iPhone sales are expected to increase by about 15% to $56.54 billion, a slowdown from about 22% growth in the previous three quarters. The financial report will only cover 9 days of sales of the new iPhone 18 Pro model, while the iPhone Duo, Apple's first folding screen phone, will go on sale on October 23, which will benefit the holiday season.
In the US, some buyers of this device, which starts at $1999, have reported cracks and lines at the center fold of the inner screen. As a result, Apple is providing a switch service. Duo's online orders sold out within minutes, and statements about Duo's sales performance will be closely watched.
IDC analyst Nabila Popal said she expects demand for Duo to continue to exceed supply despite screen issues. The test, she said, is how quickly Apple can provide switches for affected devices when supply is tight.
Bank of America (BAC.US) estimates that Duo buyers will have to wait an average of 79 days to receive the goods, and the delivery time will continue until January next year.
