Apple (AAPL, Financial) is expected to post its biggest quarterly sales in two years this Thursday, fueled by strong iPhone sales, particularly in China, as the financial year concludes. This quarter's revenues will provide an early indication of how the market has received the newly launched iPhone 16 series, introduced just days before the end of Apple's fiscal fourth quarter.
However, investor attention is likely to shift to Apple's management commentary on first-quarter performance, particularly as the Touch ID-only rollout may undermine the anticipated AI-based “super-cycle” for the iPhone. Competing with Android devices from Samsung and tech giants like Microsoft, Apple is eager to capitalize on the generative AI trend sweeping the industry.
Bernstein analyst Toni Sacconaghi emphasized, “The strength of the iPhone 16 cycle is critical as we head into the December quarter and fiscal year 2025. Although Apple is likely optimistic about the iPhone 16 and Apple Intelligence, these factors do not guarantee success in this cycle.”
Following last Monday, Apple began a limited rollout of these features to American users who speak English, following the recent market debut of the iPhone 16. Notably, Apple Intelligence will not be available in key markets such as Europe and China for now. This absence comes as Apple faces increased competition from a resurgent Huawei and other domestic brands like Vivo, Xiaomi, and Honor.
Concerns have been raised that customers might postpone their purchases to next year, potentially delaying avital sales boost during the holiday season. Research firm LSEG estimates that iPhone sales for the September quarter could rise by 3.8%, halting a two-quarter decline.
