Analysts expect that Apple Intelligence feature may be disappointing, and the replacement demand stimulus may emerge in subsequent feature iterations; MAC's entire lineup will be equipped with the M4 chip, providing better performance support for AI functionality; The Q4 financial report of fiscal year 2024 is also on the way, and Goldman Sachs optimistically expects profits to greatly exceed consensus expectations.
This week is of great significance to . $Apple (AAPL.US)$ Apple will not only release major software and hardware updates, but also announce the financial performance for Q4 of the 2024 fiscal year.
On Monday (October 28), Apple will officially launch Apple Intelligence and iOS 18.1, while the new Mac series with M4 chips will be unveiled; post-market trading on Thursday (October 31), Apple will also announce the financial report for Q4 of the 2024 fiscal year.
Specifically, Apple will officially launch Apple Intelligence and iOS 18.1, but the initial AI effects of Apple may be disappointing, with the switch demand stimulation possibly appearing in subsequent feature iterations.
The new Mac products are ready to be launched, all equipped with M4 chips, providing better performance support for Apple Intelligence features.
The financial report for Q4 of the 2024 fiscal year is also coming, with Wall Street expecting Apple's Q4 revenue to be $94.32 billion, a 5.38% year-on-year increase; earnings per share to be $1.53, a 4.85% year-on-year increase. Goldman Sachs is optimistic, expecting strong demand for the iPhone 16, with profits expected to significantly exceed expectations.
What new features will Apple AI officially introduce?
On Monday (October 28), Apple will officially launch Apple Intelligence and iOS 18.1.
The introduction of Apple Intelligence in iOS 18.1 will be available to users of the iPhone 16 series and iPhone 15 Pro series. Specific features introduced will include a writing tool suite that supports text proofreading and rewriting, photo cleaning, notification summaries, and enhanced Siri features.
It is worth mentioning that photos may be the biggest beneficiary of Apple AI, allowing users to use text prompts to create photo and video memory movies from the gallery, similar to Google's magic eraser cleaning function, where unwanted objects can be deleted from photos with just a tap.
As an important part of Apple AI, Siri has undergone a thorough transformation for the first time. When summoning Siri, the entire screen will flash, allowing users to interrupt the Siri assistant and even correct themselves during the request process.
However, the initial AI effectiveness of Apple may not be satisfactory.
According to the well-known tech journalist Mark Gurman, after trying out Apple Intelligence in iOS 18.1, Gurman believes that its functionality has not met people's expectations, and consumers may be disappointed.
TF International analyst Ming-Chi Kuo also stated that some market participants optimistically expect that Apple Intelligence may significantly increase iPhone shipments, but Apple's recent reduction in orders suggests that this optimistic expectation may not be realized in the short term. According to Ming-Chi Kuo's estimate, iPhone 16 orders may decrease by around 10 million units over three quarters, indicating that the AI features have not significantly boosted flagship phone shipments.
Overall, iOS 18.1 is just the first step for Apple AI, with feature updates expected to continue into next year. Techsponential analyst Greengart stated:
All of these are improvements, some more than others, but they do not completely reshape the functionality of the iPhone. These AI features are like enhancements to existing functionality in the entire operating system and will not fundamentally change how you use your phone.
IDC's Senior Research Director Nabila Popal predicts:
Apple's sales in the fourth quarter are expected to achieve quite healthy growth, mainly benefiting from those typical 3 to 4-year upgrade users, namely those who are currently using old iPhone models (such as 13, 12, or older models).
The growth of Apple Intelligence will come next year, with a year-on-year sales growth of Apple close to 5% by 2025. We expect that by then, consumers' awareness of Apple Intelligence will increase, use cases will expand, and more language support will be introduced.
MAC's new products are ready to be launched, all equipped with the M4 chip.
In addition to Apple Intelligence, Apple will also release iMac, Mac mini, and MacBook Pro this time. These new products will all come standard with the M4 series processor, providing better performance support for Apple Intelligence features.
Among them, the appearance of MacBook Pro and iMac will be similar to the current versions, while Mac mini will undergo a major redesign for the first time in over a decade, becoming smaller and more similar to the Apple TV set-top box. The Mac mini model will be equipped with the M4 or M4 Pro chip, capable of handling ray tracing for the first time, thereby achieving better graphics performance.
It is worth mentioning that compared to the previous generation mini with the M2 chip, the central processor performance of the M4 chip can increase by up to 1.5 times, and the high-performance cores use higher-bandwidth decoding and execution engines. It also integrates a more powerful new generation machine learning accelerator. This advancement means that the processing capabilities of all Mac models will be significantly improved.
Will there be any 'better-than-expected' surprises in the third-quarter financial report?
At 2:00 am on Friday, November 1st, Apple will also announce its Q4 financial report for the 2024 fiscal year.
Wall Street expects that Apple's Q4 revenue will be $94.32 billion, a 5.38% year-on-year increase; earnings per share will be $1.53, a 4.85% year-on-year increase. It is expected that iPhone sales will rebound in the fourth quarter after two consecutive quarters of decline.
Apple's Q3 revenue and profits have exceeded expectations for six consecutive quarters, with service revenue hitting a six-quarter high. However, iPhone sales in Greater China have declined more than expected year-on-year. Cook expressed long-term confidence in the Chinese market.
Previously, Apple executives stated in a release that artificial intelligence will be another reason for people to buy new iPhones. It is expected that Apple's total revenue growth in Q4 will be similar to Q3, with service revenue recording double-digit percentage growth.
Goldman Sachs is optimistic about the strong demand for the iPhone 16, with profits expected to significantly exceed expectations.
Goldman Sachs analyst Michael Ng expects earnings per share for this quarter to be $1.61, with revenue expected to be $94.5 billion, higher than the general expectations on Wall Street. Michael states:
The continued demand for older iPhone models is a bullish factor, and the demand for the newly released iPhone 16 may be better than initially expected. Demand for the iPhone 16 is relatively stable year-on-year, and better than expected compared to the same period last year, with shorter delivery times and improved production levels.
Michael believes that Apple's expansion into the AI field is a 'long-term demand-driven factor'.
Apple has chosen to slowly introduce Apple Intelligence, and we believe that with the release of the 15 Pro/Pro Max and 16 series with more unique features, users will be inclined to upgrade their iPhones.
Editor/Rocky
