Apple Faces Slower Growth Amid AI Delays and Rising Chinese Competition
Apple is set to report modest quarterly revenue growth, with AI development delays and intensifying competition from Chinese smartphone makers impacting iPhone sales during the key holiday season.
While tech giants like Google and Samsung have leveraged AI innovations to boost demand, Apple’s iPhone 16 series launched without major AI-driven features, and key AI services—such as an enhanced Siri—are only expected later in 2025.
Apple’s AI struggles were highlighted after it had to withdraw a news-summarization tool due to inaccuracies, drawing criticism from global media outlets.
Market Impact:
- Apple’s global smartphone market share declined to 23% in Q4 2024 from 25% in 2023 (IDC).
- In China, a key market, Apple’s share fell 10 percentage points to 17%, driven by Huawei’s resurgence and domestic competition.
- Government subsidies for smartphone purchases in China exclude high-end iPhones, favoring mid-tier local brands.
- Apple shares have fallen 5% in January 2025 due to weak iPhone demand concerns.
Revenue Expectations:
- Apple is projected to post 3.8% revenue growth in Q1 FY2025, down from 6.1% in the previous quarter.
- iPhone sales may increase 1.9%, weaker than the 5.5% growth in Q4 2024.
- Mac and iPad sales are expected to grow 2.3% and 4.2%, respectively.
- Apple’s services business, a growing revenue driver, is forecasted to rise 12.9%.
Apple also faces currency headwinds, with the U.S. dollar strengthening 8% in Q4 2024, potentially affecting international revenue.
