4 Key Takeaways From Apple's Earnings Call

Naomi Buchanan

Thu, Aug 1, 2024, 6:14 PM 3 min read

New AI Features To Be Rolled Out in Stages

Amid speculation about when new AI features will be released after Apple unveiled Apple Intelligence in June, Cook suggested the new features will become available to users over time rather than all at once.

The CEO said the company plans to roll out Apple Intelligence to U.S. English users in the fall, and then "proceed with more functionality, more features, and more languages and regions" in the next year.

Cook also said Apple plans to integrate ChatGPT features into iPhones by the end of the 2024 calendar year through its partnership with OpenAI.

Apple provided developers a first look at Apple Intelligence ahead of reporting earnings through the beta version of iOS 18.1.

Record Base Could Add Fuel to AI-Driven Upgrade Cycle

Cook said that while it may be difficult to project upgrade rates now, the company is "very excited" about the "level of value" Apple Intelligence is expected to bring users.

Apple Intelligence will run on iPhone 15 and newer devices, which could drive consumers to upgrade for the AI features.

Cook also reported Apple's installed user base reached a record high, in what could add fuel to the scale of a potential AI-driven upgrade cycle.

Apple is expected to announce the iPhone 16 with iOS 18 in September, with AI capabilities to follow.

Double-Digit Growth in Services Revenue

After Apple reported record-high revenue from its services segment in the third quarter, the company said it expects double-digit growth to another record high in the fourth quarter.

Apple reported its services revenue climbed to $24.21 billion in the third quarter, up 14% from the year-ago period. By contrast, product sales grew about 1.6% as iPad and Mac sales rose, while iPhone sales declined close to 1%.

The company reported total revenue of $85.78 billion for the quarter, representing 5% year-over-year growth.

Improvements in China Amid Pricing Discounts

Despite reporting a year-over-year drop in China sales, Cook said there were signs of improvement in the region compared to the first half of fiscal 2024, suggesting recent pricing discount efforts could be paying off.

The company reported a 6.5% year-over-year decline in sales in the China region, though Cook said around 3% was currency-related.