Apple’s AI moment is still a ways off
Subscribe to enjoy similar stories. iPhones have gotten much better over the years. For Apple, that isn’t always helpful.
Apple’s fiscal first-quarter report Thursday afternoon showed iPhone revenue falling nearly 1% from a year earlier to $69.1 billion for the period. That was below even the anemic 1.4% growth Wall Street had anticipated—and a notable slowdown from the 6% revenue growth Apple’s largest product line showed in the same period last year. Given that Apple launches its new smartphones in late September, the December-ending quarter typically accounts for a little over a third of the company’s annual iPhone sales.
That makes Thursday’s results the latest confirmation that the iPhone 16 family—the first to include Apple’s artificial-intelligence tools—isn’t resonating much with consumers. Or at least, isn’t exciting enough to spark one of the company’s vaunted “supercycles" that are becoming fewer and further between these days. The last time iPhone revenue grew by double digits annually was the fiscal year that ended in September 2021, led by the iPhone 12 family.
A large base of users on a three-year-old phone once looked like fertile ground for a strong upgrade cycle. But with more iPhone models now fetching price tags well over $1,000, Apple’s customers have a powerful incentive to get as much life out of their devices as possible. Wireless analyst Craig Moffett of MoffettNathanson says iPhone buyers in the U.S.
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