Apple Earnings Preview: iPhone Demand Under Scrutiny

Key Metrics

* EPS: $2.35 (est.)
* Revenue: $124.1 billion (est.)
* iPhone Revenue: $71 billion (est.)
* Services Revenue: $26 billion (est.)
* Greater China Revenue: $21.5 billion (est.)

Analysts' Concerns

* Jefferies and Loop Capital downgraded Apple's stock due to concerns about iPhone sales and lower-than-anticipated results.
* Oppenheimer downgraded shares, citing slower iPhone growth and lack of AI innovation.

iPhone Prospects

* iPhone market share declined 1% year-over-year in Q4 despite increasing smartphone shipments.
* Apple's AI push through Apple Intelligence updates may not have driven strong upgrade demand.
* Apple plans to enhance Apple Intelligence throughout the year, but hardware upgrades may remain more appealing to consumers.

Segment Outlook

* iPhone revenue expected to increase from $69 billion to $71 billion.
* Services revenue projected to rise from $23.1 billion to $26 billion.
* Greater China revenue forecast to surpass $21.5 billion.

China Challenges

* China has been a challenging market for Apple, with sales declining in recent years.
* Apple's renminbi weakness and lower iPhone sales have contributed to the downturn.

Upcoming Products and Growth Potential

* Apple is expected to release new products, including the iPhone SE, iPads, and MacBook Airs.
* These products may drive revenue growth across business segments.

Stock Performance

* Apple shares have gained 24% over the past 12 months, similar to Alphabet (GOOG, GOOGL).
* Microsoft (MSFT) has been a laggard, with an 8% increase.
* Meta (META) has surged 69%, while Nvidia (NVDA) has outpaced all with a 102% gain.