The Fruit of Resilience
Apple, navigating the bustling maze of the Chinese smartphone market, has wielded price cuts as a shield to safeguard its market presence against rising competition.
According to Wedbush Securities, this defensive strategy seems to be bearing fruit.
Signs of Stability
A recent supply chain check, as reported by Wedbush Securities analyst Dan Ives, highlighted encouraging indications of iPhone stabilization. This development carries significant weight as Apple gears up to unveil the highly anticipated iPhone 16 in September.
“Our Wedbush Tech Team’s Taiwan checks over the last week indicate April results for the Apple supply chain were 2% ahead of historical linearity while consensus remained unchanged,” Ives revealed in an investor note. This outperformance during April could be attributed to inventory build-up ahead of China’s upcoming holidays in May and June, coupled with a surge in Chinese handset build projections for the June quarter. Positive expectations for the third quarter builds underscore our steadfast belief that a surge in Apple iPhone builds is on the horizon, paving the way for an eagerly awaited iPhone 16 upgrade cycle set to kick off in September.”
All Eyes on WWDC
Apple’s shares have been on the rise, soaring over 10% in the past month following the company’s report of fiscal second-quarter results that exceeded expectations, alongside the announcement of a substantial $110B buyback.
Optimism is in the air regarding Apple’s prospects, with sentiments turning bullish as the tech giant navigates its way past the iPhone slowdown. Anticipation is building as the market eagerly awaits next month’s developer conference, with high hopes pinned on Apple’s upcoming generative artificial intelligence-related disclosures and their integration into the Apple ecosystem.
For Ives, the excitement surrounding the forthcoming developer conference marks a pivotal moment for Apple. He anticipates that the formal announcement of a flagship OpenAI partnership will introduce an OpenAI Chatbot endowed with exclusive features that expand upon the existing Apple large language models. Moreover, the conference could serve as the launchpad for Apple to showcase its prowess in AI by powering its high-end chips with this innovative technology.
Additionally, Ives speculates that Apple might be laying the groundwork for an AI App Store where developers can craft consumer applications leveraging the AI tech stack.
With the imminent debut of the iPhone 16 and the slew of AI features in the pipeline, Ives envisions a smartphone upgrade “supercycle” on the horizon. He predicts that as many as 270M iPhones could undergo a refresh following the revelation of the iPhone 16, signaling a wave of consumer excitement and anticipation.