Apple Inc. is poised to announce its most significant quarterly revenue increase in two years, driven by robust demand for its iPhone 16 series, particularly in China. This report, expected on Thursday, will mark a pivotal moment for investors as they seek insights into consumer interest in the latest iPhone models and the company’s strategy amid a rapidly evolving technological landscape.

Analysts predict a 3.8% rise in iPhone sales for the September quarter, a positive shift following two consecutive quarters of decline. Overall, Apple’s revenue for its fiscal fourth quarter is anticipated to increase by 5.7%, according to estimates compiled by LSEG. Notably, revenue from Greater China is expected to surge by 6.6%, reflecting a recovery in one of Apple’s most crucial markets. This comes amid reports of competitive pricing strategies, such as discounts of up to 10% on certain iPhone models on platforms like Pinduoduo before their official release.

The iPhone 16 series, launched just days before the end of the fiscal quarter, is critical for Apple, not just in terms of sales but also as a signal of its position in the competitive smartphone market. Bernstein analyst Toni Sacconaghi emphasized the significance of the iPhone 16 cycle, stating that it is “the most important question heading into both the December quarter and FY25.” Investors are eager for positive commentary from Apple’s executives regarding the success of the iPhone 16 and the anticipated impact of its new AI features, dubbed Apple Intelligence.

However, concerns linger about the slow rollout of these AI capabilities. As competitors like Samsung and Microsoft aggressively develop and launch applications leveraging generative AI, Apple risks falling behind. The limited availability of Apple Intelligence—currently accessible only to U.S. customers in English—exacerbates these worries, particularly as it remains absent in critical markets like Europe and China. Here, Apple faces intensified competition from local players such as Huawei, Vivo, Xiaomi, and Honor, which could influence consumer purchasing decisions, potentially pushing them to delay device upgrades until next year.

This delay could dampen sales during the crucial holiday shopping season, a time when Apple traditionally sees significant sales spikes. Analysts fear that the combination of economic uncertainty and the slow introduction of AI features might deter consumers from purchasing new devices, adversely affecting Apple’s revenue growth.

While the iPhone is expected to remain a strong performer, other segments of Apple’s business are also under scrutiny. Sales of the iPad are projected to rise by 10.1% to $7.09 billion, following a remarkable 23.7% growth in the previous quarter. This growth is fueled by the release of upgraded iPad models, showcasing Apple’s commitment to innovation across its product lines.

Additionally, Apple’s services sector, which includes the App Store, is expected to experience a 13.3% increase in sales. However, this growth represents a slowdown from previous quarters, and the services division faces challenges from ongoing regulatory scrutiny. The European Union has charged Apple with breaching antitrust regulations, adding pressure on the company’s operations in one of its largest markets.

Moreover, Apple’s lucrative agreement with Alphabet, which designates Google as the default search engine on iOS devices, is under examination in the U.S. This deal has raised concerns about competition and market fairness, potentially impacting Apple’s long-term profitability.

The upcoming quarterly results will also reflect a significant one-time income-tax charge of approximately $10 billion, stemming from a ruling by Europe’s top court against Apple in its tax disputes in Ireland. This charge underscores the financial and regulatory challenges that Apple continues to face as it navigates complex global markets.

As Apple gears up to report its fourth-quarter results, the focus will not only be on revenue and sales figures but also on how the company plans to address these challenges. With the competitive landscape shifting rapidly and AI integration becoming increasingly crucial, investors and analysts alike will be watching closely to gauge Apple’s strategic direction moving forward. The tech giant’s ability to innovate and adapt will play a critical role in its success as it enters the next phase of its growth trajectory.

(Adapted from ThePrint.in)

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