Apple is expected to address investor concerns this week over delayed artificial intelligence rollouts and escalating U.S.-China trade tensions, as the iPhone maker prepares to report quarterly results on Thursday.
Analysts forecast a second consecutive quarterly decline in iPhone sales, despite a surge in demand for the company’s new low-cost iPhone 16e earlier this year. The uptick in January-March orders came ahead of possible new tariffs, but it may not be enough to offset broader headwinds.
“Tariffs are a sword of Damocles for Apple – dangling, disruptive and politically charged,” said Eric Schiffer, chairman of California-based private equity firm Patriarch Organization, which holds Apple shares.
Apple, which manufactures around 90% of its products in China, has seen its stock fall more than 16% in 2024, erasing over $600 billion in market value. While electronics have thus far been spared from U.S. tariffs, policymakers in Washington have signaled that additional levies could be imposed in the coming weeks.
In response, Apple is accelerating efforts to diversify its supply chain. The company is reportedly shifting production of U.S.-bound iPhones to India, and analysts expect it will attempt to absorb some of the cost impact through its suppliers, limiting retail price hikes to maintain competitiveness.
The company is also facing scrutiny over the pace of its AI developments. Unlike competitors Google (GOOGL.O) and Samsung (005930.KS), Apple has yet to deliver several AI features it teased at its last developer conference. Updates to the Siri voice assistant have been pushed to 2026, and a commercial promoting unavailable AI tools has since been pulled.
The delay has been particularly felt in China, where AI capabilities are considered crucial to compete with domestic brands like Huawei. While Apple has partnered with Alibaba to bring AI services to Chinese users, a release timeline has not been provided.
Apple’s market position in China has weakened, with iPhone shipments in the region falling 9% in the March quarter — the only major brand to register a decline, according to IDC data. However, global sales were buoyed by strong demand in India, where the $599 iPhone 16e helped Apple secure the top spot in smartphone shipments for the quarter, research firm Counterpoint reported.
Source: Reuters