IPhone Sales Predicted To Increase 3% During Holidays, Challenges Occur In China Market

Apple's Vision Pro sales are predicted not to boom (photo: x @applenews)

JAKARTA - Apple's iPhone sales likely rose by 3% during the key holiday period, the best growth in the last five quarters. However, analysts expect the year to be difficult for companies in China, where they face regulatory pressures and competition that bounce back from Huawei.

Wall Street estimates that Apple's latest flagship, the iPhone 15, will face stiff competition from Samsung's new Galaxy S24 which is equipped with a generating artificial intelligence feature, as well as Huawei phones powered by Chinese-made chips.

Generative artificial intelligence could be a major factor in determining who will be the largest company in the world this year. Microsoft managed to surpass Apple in recent trading sessions with a valuation of US$3 trillion (Rp46 quadrillion), and analysts expect the company to strengthen its position soon as it sells more products filled with artificial intelligence.

Although Apple's shares rose nearly 50% last year, they remain the smallest winners among stocks known as the Magnificent Seven.

Apple faces some obstacles in China, where the country's property sector faces problems, while officials in China state that the iPhone is no longer in demand in government offices. iPhone shipments to China fell 2% in the December quarter, market research firm IDC said analysts said Android phones were now popular there, assisted by Huawei's popularity.

"The iPhone faces structural challenges that will lead to a significant drop in shipments in 2024, including the emergence of new paradigms in high-end smartphone designs and continued decline in shipments in the Chinese market," said Ming-Chi Kuo, an analyst at TF International Securities.

The bright spot in Apple's first quarterly results, scheduled for Thursday 1 February, is likely to lie in its service segment, which includes revenue from the App Store, Apple TV, and Apple Music. Revenue from this service segment is likely to grow by 12.5% in the Apple quarter ending in December, according to LSEG data.

However, the App Store faces challenges in Europe, where the new law will force Apple to allow developers to bypass its payment system and pay commissions to Apple, from March.

Overall, it is expected that Apple will report quarterly revenues rising 0.7%, ending the fourth quarter in a row decline. However, analyst Bernstein expects iPhone sales to drop 3% by 2024, only slightly increasing overall revenue.

Apple Vision Pro, their biggest risk bet since the introduction of the iPhone more than a decade ago, has been available for bookings in the US on January 19. Analysts don't expect it to be a significant revenue driver this year.

"His clearer statement on the GenAI initiative, the successful launch of Vision Pro, and the updated capital allocation policy has the potential to be a driving force for Apple in the next six months," said CFRA research analyst Angelo Zino.