Apple expected to report fall in iPhone sales

The world's most valuable firm will wrap up Big Tech earnings on Thursday, with a likely 1.6pc drop in total quarterly revenue, according to Refinitiv – its steepest drop in third-quarter revenue since 2016.

IPhone sales likely fell more than 2pc in the period, according to 24 analysts polled by Visible Alpha, compared with a near 3pc increase a year earlier and a 1.5pc rise in the quarter ended March.

The quarterly report could mark a break from an upbeat earnings season for the likes of Meta Platforms, Alphabet and Microsoft that have shown resilience in their cloud businesses and an uptick in digital ad sales.

"Apple is not immune to general macroeconomic trends and will continue to set the pace (for the smartphone industry) for quite some time," said Bob O'Donnell, founder of TECHnalysis Research.

With details about the new iPhone 15 expected next month – which could sport the more universally accepted USB-C port on some models – iPhone sales could get a small nudge in the July-September quarter, said analysts, who predicted a mixed bag of results for the period.

Apple, whose CEO is Tim Cook, traditionally does not provide a quarterly outlook, but analysts expect the company may elaborate how it is using Al to improve its upcoming products.

The company has so far avoided buzzwords like Al at its events, in a contrast with tech giants including Alphabet and Microsoft. Last month, Bloomberg News reported Apple has quietly built its own framework to create large language models known as "Ajax".

"We expect Apple's updated comments on its Al aspirations to be a focus," analysts at Well Fargo wrote in a research note, adding that any commentary around the technology could boost the stock.

Apple's shares have gained more than 50pc so far this year, compared with a nearly 37pc increase in the tech-heavy Nasdaq Composite (IXIC).

Much of the weakness in iPhone sales is expected to come from the Americas, where revenue is set to fall 6pc, analysts said.

Sales from China – Apple's third-largest market – are expected to be flat due to an uneven economic recovery, though the company has fared better than Android rivals in the country.