Apple Earnings Preview: AI, iPhone Demand, Services Revenue

Apple will report its earnings after US markets close on 31 October. 

iPhone Sales

iPhone sales make up roughly half of Apple's total revenue, making it a key focus. According to Canalys, global smartphone shipments grew by 5% year-on-year in Q3, with Apple's shipments reaching 56 million units, up 3.5% year-on-year, marking a record high for Q3. Apple's market share rose to 18%, with the gap between Apple and the top position (Samsung, at 57.8 million units) narrowing significantly. 

A Canalys analyst predicts that with Apple Intelligence advancing and supporting more languages, the iPhone 16 could support strong growth through year-end, with momentum continuing into the first half of 2025.

IDC also projects sustained growth for Apple in the upcoming holiday season as consumers look to upgrade to AI-driven devices. IDC attributes the solid performance of older iPhone models, particularly the iPhone 15, to aggressive promotions and effective marketing of Apple Intelligence.

However, there are some headwinds for iPhone 16. Renowned analyst Ming-Chi Kuo has indicated that iPhone 16 orders may be cut by around 10 million units for Q4 2024–H1 2025. Morgan Stanley also notes that since its September release, the delivery cycle for the iPhone 16 has slowed in the eighth week, with the Pro models seeing a more noticeable slowdown. Tim Cook is expected to share insights into demand for the latest iPhone in the upcoming earnings report.

Apple Intelligence and Global Markets

The highly anticipated Apple Intelligence recently launched, but when will it enter China and European markets?

Other Hardware Product Lines

On October 30, Apple released a new generation of MacBook Pro laptops, all equipped with the M4 series chips (M4, M4 Pro, and M4 Max), significantly enhancing performance. The Apple Vision Pro has also expanded globally, now available in 12 countries. 

Beyond iPhone, what are the performance trends for other hardware lines like MacBook, iPad, and wearables?

Software and Services Revenue

Apple's vast user base and high customer loyalty are key factors underpinning steady growth in Apple Services revenue. Are Apple's high-margin software and services businesses maintaining steady growth?

Recently, Apple has been working on a new gaming-focused app, which, according to 9to5Mac, will combine features of the App Store and Game Center, without replacing Game Center but integrating with users' Game Center profiles. With this new app, Apple seems intent on strengthening its appeal to gamers. 

Other Events

Indonesia, the world's fourth-most populous country, recently banned the iPhone 16—how might this impact Apple?