Apple's latest financial report not only exceeded overall analyst expectations but also showcased robust sales performance for the iPhone 16, which has garnered significant attention from the public.
According to CEO Tim Cook, the previous quarter's report included only the first week of iPhone 16 sales, yet it still outperformed last year's iPhone 15 series. The iPhone 15 also showed better sales compared to the prior year's iPhone 14.
Moreover, the Greater China region reported a decline of less than 1% year-over-year, indicating that the launch performance of the iPhone 16 series showed no signs of crashing, contrary to earlier pessimistic market sentiments.
Various mobile supply chain and chip industry players maintain a relatively positive outlook on the current smartphone market. For instance, MediaTek previously stated during its earnings call that demand in the smartphone market is significantly better than initial forecasts made at the beginning of 2024. Some chip manufacturers admitted that there was initially little confidence regarding smartphone sales in 2024, with many believing a downturn was likely.
However, given the current situation, both Apple and Android flagship devices appear to be maintaining strong momentum heading into the second half of the year. Despite unfavorable macroeconomic factors and the incomplete development of AI applications, the stability of the current market has left stakeholders quite satisfied.
AI features: not a significant draw for consumers
Cook anticipates low-to-mid single-digit percentage growth for Apple's operational performance this season, with iPhone products expected to deliver steady sales. This statement has already provided some reassurance to the market, especially when compared to earlier concerns about order cuts for the iPhone 16 and potential sales crashes in the Greater China region.
Yet, even though iPhone 16 sales are not crashing, skepticism remains regarding Cook's assertion that Apple Intelligence will drive hardware sales. On one hand, Apple's financial projections are not particularly optimistic, and on the other, none of the AI features currently offered by any brand have drawn in consumers.
An insider familiar with the mobile industry pointed out that the rollout of Apple Intelligence is progressing slowly, especially in non-English-speaking markets where most consumers will have to wait until 2025 to access these features. This means that the majority of consumers will not be able to utilize Apple Intelligence on their iPhone 16s.
Furthermore, consumer surveys indicate that while there is interest in AI applications, most consumers prefer to wait and see before purchasing new devices solely for AI capabilities. They hope to consider buying a new device once AI features become more refined.
Some market opinions believe that historically, cases where software innovations have driven hardware sales are exceedingly rare. Even Apple, known for numerous software application breakthroughs, typically sees significant sales growth stemming from hardware specification upgrades. Relying on AI to boost smartphone sales may prove challenging in the short term.
Particularly, multiple chip manufacturers have noted that the growth fueled by AI will not stem from any single killer application but rather from a comprehensive ecosystem that enhances human-computer interaction experiences. Achieving genuine consumer engagement will likely require further time for maturation, leaving the ultimate success or failure dependent on consumer market dynamics for both iPhone and Android platforms.
