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January 5, 2024
This executive summary is based on the article “Apple’s Biggest Challenges in 2024 Have Little to Do With the iPhone”, published by Bloomberg and written by Mark Gurman, on January 7, 2024.
What is the message?
Apple faces a pivotal year in 2024 with promising new products but also encounters significant challenges beyond iPhone sales.
The company anticipates a fifth consecutive quarter of declining sales, prompting concerns from Wall Street.
However, the challenges extend beyond the iPhone, including catching up in AI, the launch of the Vision Pro headset, revitalizing iPad and Mac sales, and dealing with antitrust regulations affecting the App Store.
ONE PAGE SUMMARY
What are the key points?
Sliding iPhone Sales:
Apple is on the verge of reporting a fifth quarter of declining sales, raising concerns about the iPhone’s performance, especially in China.
Underwhelming iPhone 15 Pro Results:
Despite the introduction of iPhone 15 Pro, Apple hinted at only marginal sales growth, leading to concerns about the device’s innovation and market reception.
Challenges Beyond iPhone:
The primary challenges for Apple in 2024 include lagging behind in generative AI, uncertainties around the revenue potential of the Vision Pro headset, the need to revitalize iPad and Mac sales, and increased scrutiny of the App Store by antitrust regulators.
Generative AI Lag:
Apple is trailing competitors in generative AI, with plans to announce offerings at the Worldwide Developers Conference in June. The company aims to integrate AI into core apps, services like Apple Music, and a revamped digital assistant, Siri.
Hardware Sales Boost:
Apple faces the task of boosting sales for Apple Watch, AirPods, Mac, and iPad. The Vision Pro headset’s success is uncertain, and the iPad and Mac categories need revitalization.
App Store Antitrust Scrutiny:
Antitrust regulators, particularly through the Digital Markets Act in Europe, pose a challenge to the App Store. Apple must split the profit-generating App Store for the EU, potentially impacting revenue growth.
Vision Pro Launch Preparations:
Apple’s Vision Pro headset is set for an imminent launch, with retail stores gearing up for the release. Employee trainings, meetings, and inventory changes indicate the device’s arrival.
Apple Watch Series 9 Sales Ban:
Apple faces challenges in the Apple Watch Series 9 sales ban saga. A ban imposed by the US International Trade Commission may be affected by decisions from US Customs and Border Protection and federal courts.
What are the key statistics?
Anticipation of a fifth consecutive quarter of declining Apple sales.
The launch of the Vision Pro headset, Apple’s first new product category in nearly a decade.
What are the key examples?
Apple’s lag in generative AI compared to competitors like Microsoft, Amazon, Samsung, and Google.
Challenges in boosting sales for Apple Watch, AirPods, Mac, and iPad categories.
Conclusion
While Apple grapples with iPhone sales concerns, the company’s challenges in 2024 extend beyond its flagship product.
Addressing AI competitiveness, ensuring the success of the Vision Pro headset, revitalizing iPad and Mac sales, and navigating App Store regulations are crucial for Apple’s sustained success.
Despite these challenges, the company remains optimistic about the consumer appeal of its products, including the potential success of the Vision Pro, new AI features, and overhauls to Apple Watch and AirPods.
The iPhone, with its consistent revenue, remains a reliable anchor for Apple in uncertain times.
To read the original publication, click here.
