Apple has warned investors that its upcoming series of new products may not be as profitable as the iPhone.
The company issued the warning in its latest securities filing as part of a list of “risk factors” that could weigh on its business.
Apple, which recently replaced AI chip maker Nvidia as the world's most valuable company, last week reported a 6% increase in revenue in its most recent quarter, but said it expected growth to slow this quarter. Ta.
Apple said in a Sept. 28 filing with the Securities and Exchange Commission that “new products, services, and technologies may replace or be replaced by existing products, which could result in reduced revenues and lower margins. “This could result in a decline in the Company's business and could have a material adverse effect on the Company's business.”
Apple's warning is Latest 10-K regulatory filings – Annual corporate financial reports that publicly traded companies must file with the SEC.
In past years, Apple has been less direct about its 10-K filings when discussing new products and their potential profitability. According to the Financial Times.
Instead, the company cited a “higher cost structure” for new product introductions.
Apple also said in the filing that it is monitoring “geopolitical tensions” that could impact sales.
The Cupertino, California-based company has been investing in AI to catch up with technology rivals like Google and Meta.
Fourth-quarter sales of the company's main product, the iPhone, rose 5.5% to $46.22 billion, compared to analysts' expectations of $45.47 billion. Other product lines also disappointed.
Apple's fiscal fourth quarter ended on September 28th, which means it only reflects sales of the iPhone 16 series, which was launched on September 20th, for a few days.
Apple CEO Tim Cook told Reuters that sales of the iPhone 16 grew faster than sales of the iPhone 15 in the same period last year, with both devices sold the same number of days in the fourth quarter.
The rollout of Apple's artificial intelligence strategy unveiled this year will depend on how well its new phones sell.
Rather than bringing AI to standalone apps and services, Apple is sprinkling Apple Intelligence across its latest operating systems in new features, such as a feature that helps you rewrite emails with a more professional tone.
These features are mostly available on iPhone 16 models with more powerful computing chips, but both pro versions of iPhone 15 run on Apple Intelligence.
According to LSEG, revenue from Apple's services business, which includes iCloud storage and Apple Music, came in at $24.97 billion, compared to analysts' expectations of $25.28 billion.
Mac and iPad sales were $7.74 billion and $6.95 billion, respectively, compared to expectations of $7.82 billion and $7.09 billion, according to LSEG data.
Revenue from Apple's Home & Wearables business, which includes Apple Watch and AirPods devices, fell to $9.04 billion, compared to expectations of $9.2 billion, according to LSEG.
with post wire
