After Apple’s (AAPL) fiscal first quarter of 2024 earnings beat analysts’ estimates, ending a four-quarter revenue decline, Chief Executive Officer (CEO) Tim Cook discussed artificial intelligence (AI), the upcoming Vision Pro launch, new EU regulations, and sales in emerging markets as China declines during the iPhone maker’s earnings call.
Table of Contents
Apple Working on GenAI, But Not Ready to Talk About It
When questioned about Apple’s AI efforts, Cook stated that the business had “some things that we’re incredibly excited about, that we’ll be talking about later this year.”
The CEO stated that the business has “a lot of work going on internally,” but that Apple is not revealing anything yet to avoid “getting ahead of itself.”
Unlike other IT behemoths like Microsoft (MSFT) and the other “Magnificent 7,” Apple has kept the specifics of its AI initiatives under wraps. On the call, Cook mentioned that he believes “there’s a huge opportunity for Apple with GenAI and AI.”
Earlier this year, Bank of America analysts raised their Apple price target, predicting that the company will benefit when AI capabilities are implemented into iPhones.
Big Name Enterprise Customers Integrating Vision Pro
Cook emphasized “the enterprise opportunities with Vision Pro,” mentioning Walmart (WMT) and software company SAP (SAP) as enterprise customers that have integrated the technology into their workflow.
The spatial computer headset is slated to be released on Friday. The company’s chief executive officer stated that the introduction would be “a historic day as we enter the era of spatial computing” and added that “Apple Vision Pro the most advanced personal electronics device ever will be available in Apple stores.”
Cook stated that the Vision Pro has “significant AI and machine learning” technology, since “all of the hand tracking and room mapping” are “driven by AI.”
Regs Harm iPhone Security, Reliability, And Usability in The EU
Cook discussed recent improvements Apple made to the App Store, Safari, and iOS, as well as Apple Pay, to comply with a new regulation that went into effect in March, the Digital Markets Act (DMA), which affects iPhones in the European Union.
The CEO stated that Apple is “extremely focused on privacy, security, and usability,” and that the business will “fall short of providing the maximum amount that we could supply because we need to comply with the regulation.”
Apple’s Chief Financial Officer (CFO) Luca Maestri stated that the changes will only effect customers in the EU market, which accounts for “roughly 7% of our global App Store revenue.”
Despite Declines in China, Apple Remains Optimistic
Cook stated that “emerging markets have been a very key area of strength” for Apple in the fourth quarter, citing “strong double-digit growth in many emerging markets, with all-time records in Malaysia, Mexico, the Philippines, Poland, and Turkey, as well as December quarter records in India, Indonesia, Saudi Arabia and Chile.”
Apple’s sales growth in emerging nations comes as sales in China fall. When queried about the dip, Cook stated that Apple was the #1 smartphone vendor in China in 2023, with iPhones taking four of the top six slots for best-selling smartphones in urban China.
Cook noted that the company has “been in China for 30 years” and that he “remain[s] very optimistic about China in the long term.”
Some analysts have indicated that investor concerns about dropping iPhone sales in China are overdone because sales in other regions might offset losses in China.