31 January 2025
If you are covering Apple or Samsung’s latest financial results, please see the following comment from Ben Barringer, technology analyst at Quilter Cheviot:
Apple
"Apple's latest results posted a slight beat, driven primarily by strong performance in its Services, Mac, and iPad segments, rather than iPhone sales, which remained flat. The iPhone's performance, in particular, was underwhelming, with sales stagnating and a notable decline in China. The uptick in Mac and iPad sales was attributed to new product releases, but this felt more like a short-term boost than a significant structural shift.
"Services, which rose 14%, continue to be a bright spot for Apple, though the company has tempered expectations, guiding future growth down to 11%. Overall, the company's guidance of 3-5% revenue growth is in line with market expectations, signalling a relatively "vanilla" quarter without major surprises.
"Apple’s broader ambitions now hinge on its new cycle of artificial intelligence, with a slight uptick in engagement following the recent release of Apple Intelligence. Apple is set to release additional language support for its AI in April, which could further boost adoption. The market has been getting excited about the implications of DeepSeek, believing that cheaper inference could significantly benefit edge AI. However, company didn’t fully endorse the idea, leaving some uncertainty around its long-term potential.
"China remains a challenge for Apple, with a competitive market posing difficulties, while India has been highlighted as an opportunity by the company. Despite the excitement around emerging AI technologies, Apple’s growth remains more expensive than its peers in the "magnificent seven," suggesting that investors may need to recalibrate their expectations."
Samsung
"Samsung's latest financial results show a year-on-year revenue increase of about 12%, with operating profit surging by around 130%. However, the company faced a tough quarter, with operating profit falling by 29.3% and revenue slipping over 4% compared to the previous quarter.
"The company is grappling with fierce competition in the DRAM (dynamic random access memory) market, particularly from Chinese manufacturers at the low end, and from SK Hynix at the high end. This is compounded by the booming demand for high-bandwidth memory (HBM), a type of DRAM that has become essential in high-performance computing applications such as AI.
"While both Samsung and SK Hynix are major players in the DRAM market, SK Hynix has pulled ahead in the development of HBM, which uses vertically stacked chips to save space and reduce power consumption.
"This shift towards HBM has left Samsung playing catch-up, especially as the demand for HBM continues to rise rapidly with the expansion of AI technologies. Samsung’s ability to address these competitive challenges in the DRAM and HBM sectors will likely be a key factor in determining its future growth trajectory."
