01 November 2024
If you are covering Apple’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Apple provided the market with a small beat with its revenues, up 6%, but the numbers flatter to deceive somewhat. Services continues to do much of the heavy lifting for the tech giant as product cycles and a mature smartphone market buffet sales of iPhones, Macs and wearables. These sales are likely to continue to ebb and flow after the iPhone 16 disappointed users due to the AI capabilities not proving to be overly beneficial as yet.
“This is perhaps to be expected given Apple Intelligence has just been released. It is likely to develop over time and be more of a slow burn, but it has not been the ignition some thought it could be to turn Apple’s fortunes back to encouraging growth. While the jury is still out on the AI tech for Apple, they are rightly focusing it on the iPhone and making Siri smarter. Phones are going to be the best interface for consumer AI, but there is no killer app out there yet and as such smartphones will struggle to overcome what is now a mature market.
“That said Apple remains a very solid company, but given revenues and sales it is expensive in valuation. Without an obvious catalyst to bring high single digit growth back, investors may be better placed in some of the other Magnificent Seven companies instead.”
