Analysis predicts that Apple's Apple Intelligence feature may be disappointing, with the stimulus for upgrading likely to emerge in subsequent feature iterations; all MAC models will be equipped with the M4 chip, providing better performance support for AI functions; the Q4 financial report for the 2024 fiscal year is also on the horizon, with Goldman Sachs optimistically expecting profits to significantly exceed consensus expectations
This week is significant for Apple, as they will not only release major software and hardware updates but also announce the financial results for Q4 of the 2024 fiscal year.
On Monday (October 28th), Apple will officially launch Apple Intelligence and iOS 18.1, while the new Mac series with M4 chips will be unveiled; after the U.S. stock market closes on Thursday (October 31st), Apple will also announce the financial report for Q4 of the 2024 fiscal year.
Specifically, Apple will officially release Apple Intelligence and iOS 18.1. However, the initial AI performance of Apple may be disappointing, and the stimulus for upgrading may be seen in subsequent feature iterations.
The new Mac products are ready to be launched, all equipped with M4 chips to provide better performance support for Apple Intelligence features.
The 2024 fiscal year Q4 financial report is also approaching. Wall Street expects Apple's Q4 revenue to be $94.32 billion, a year-on-year increase of 5.38%; earnings per share are expected to be $1.53, a year-on-year increase of 4.85%. Goldman Sachs is optimistic, expecting strong demand for the iPhone 16, with profits expected to significantly exceed expectations.
Apple AI Officially Unveiled, What New Features Will Be Introduced?
On Monday (October 28th), Apple will officially launch Apple Intelligence and iOS 18.1.
With the introduction of Apple Intelligence in iOS 18.1, specific features will be made available to users of the iPhone 16 series and iPhone 15 Pro series. The introduced features will include a writing tool suite that supports text proofreading and rewriting, photo cleaning, notification summaries, and enhanced Siri functionality.
It is worth mentioning that photos may be the biggest beneficiaries of Apple AI, as users can create photo and video memory slideshows from the gallery using text prompts, similar to Google's Magic Eraser cleaning feature, which allows users to easily remove unwanted objects from photos with a single tap.
As an important part of Apple AI, Siri has undergone a thorough transformation. 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 performance of Apple AI may not meet expectations.
According to well-known tech journalist Mark Gurman, after trying out Apple Intelligence in the iOS 18.1 version, Gurman believes that its functionality has not met people's expectations, and consumers may be disappointed.
TF International Securities analyst Ming-Chi Kuo also stated that some market participants optimistically expected Apple Intelligence to significantly increase iPhone shipments, but Apple's recent order cuts indicate that this optimistic expectation may not be realized in the short term. Kuo estimates that iPhone 16 orders will decrease by approximately 10 million units over three quarters, which may indicate that the AI features have not significantly increased flagship phone shipmentsOverall, iOS 18.1 is just the first step for Apple's AI, and feature updates are expected to continue until next year. Techsponential analyst Greengart said:
All of these are improvements, some more incremental than others, but they don't fundamentally reshape the iPhone's functionality. These AI features are enhancements to existing features in the entire operating system and won't 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 healthy growth, mainly driven by those typical 3 to 4-year upgrade users, who are currently using older iPhone models (such as 13, 12, or older).
The growth of Apple Intelligence will come next year, with a year-on-year sales growth of nearly 5% by 2025. We expect that by then, consumer awareness of Apple Intelligence will increase, use cases will expand, and more language support will be introduced.
New Mac Products Ready to Launch, All Equipped with M4 Chip
In addition to Apple Intelligence, Apple will also release iMac, Mac mini, and MacBook Pro, all of which will 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 the Mac mini will undergo a major redesign for the first time in over a decade, becoming smaller and more like an Apple TV set-top box. The Mac mini models will be equipped with the M4 or M4 Pro chip, capable of handling ray tracing for better graphics performance.
It is worth mentioning that compared to the previous generation mini with the M2 chip, the M4 chip's central processing unit performance can be increased by up to 1.5 times, with high-performance cores using higher bandwidth decoding and execution engines, as well as integrating a more powerful next-generation machine learning accelerator. This advancement means that the processing capabilities of all Mac models will be significantly enhanced.
Third Quarter Financial Report Coming, Will There Be "Surprises"?
At 2:00 am on Friday (November 1st), Apple will also announce its 2024 fiscal Q4 financial report.
Wall Street expects Apple's Q4 revenue to be $94.32 billion, a year-on-year increase of 5.38%; earnings per share to be $1.53, a year-on-year increase of 4.85%, with iPhone sales in the fourth quarter expected to grow after two consecutive quarters of decline.
Apple's Q3 revenue and profit have exceeded expectations for six consecutive quarters, with service revenue hitting a new high for six quarters in a row. However, iPhone sales revenue in Greater China exceeded expectations, with Cook expressing long-term confidence in the Chinese market.
Earlier, Apple executives stated in their release that artificial intelligence will be another reason for people to buy new iPhones, and it is expected that the total revenue growth in Apple's fourth quarter will be similar to the third quarter, with service revenue recording double-digit percentage growthGoldman Sachs is optimistic about the strong demand for iPhone 16, expecting profits to significantly exceed expectations.
Goldman Sachs analyst Michael Ng expects earnings per share of $1.61 for this quarter, with revenue expected to be $94.5 billion, higher than the general expectations on Wall Street. Michael stated:
The sustained demand for older iPhone models is a positive factor, and the demand for the newly released iPhone 16 may be better than initially expected. The demand for iPhone 16 is relatively stable year-on-year, better than expected, with shorter delivery times and reduced production compared to the same period last year, indicating a more favorable data situation.
Michael believes that Apple's entry into the AI field is a "long-term demand-driven factor".
Apple's slow rollout of Apple Intelligence, we believe that with the introduction of more unique features in the 15 Pro/Pro Max and 16 series, users will be inclined to upgrade their iPhones