Renowned Apple analyst pours cold water before earnings report: Apple's shipment forecast for this year is expected to decrease by 15% YoY.

On Tuesday, renowned Apple analyst Ming-Chi Kuo from TF International Securities stated that based on their latest supply chain investigation, Apple has revised down its estimated shipments of key upstream semiconductor components for 2024 to around 200 million units, indicating a YoY decline of 15%. Among the major global smartphone brands this year, Apple may experience the largest decline.

Specifically, the shipment volumes of the Apple 15 series and the new Apple 16 series are expected to decline by 10%-15% YoY in the first half of this year (1H24) and the second half of this year (2H24), respectively, compared to the shipment volumes of the Apple 14 series in the first half of last year and the Apple 15 series in the second half of last year.

Regarding the reasons for the significant decline in shipments, Kuo pointed out that Apple is facing structural challenges:

• The emergence of new design paradigms for high-end smartphones. These include AI, specifically generative AI phones, and foldable phones, which are gradually becoming the preferred choice for high-end users when upgrading their devices.
• Continuous decline in Apple's shipments in the Chinese market. The return of Huawei and the aforementioned popularity of foldable phones are the main reasons for Apple's sales decline in China. In recent weeks, Apple's weekly shipments in the Chinese market have experienced a YoY decline of approximately 30-40%, and this downward trend is expected to continue.

Kuo predicts that it will not be until 2025 that Apple will introduce significantly redesigned new models and release a more comprehensive and differentiated generative AI ecosystem/application. Prior to that, these structural challenges may continue to adversely affect Apple's shipment situation and ecosystem growth.

Since last year, with the AI frenzy sparked by OpenAI's ChatGPT, tech giants have been launching software, hardware, and services with AI capabilities, aiming to establish a presence in the field of artificial intelligence. Apple, however, seems to have maintained a relatively cautious approach.

Nevertheless, there are signs that Apple is making efforts. A recent article on the Wall Street CN website mentioned that according to media reports, Apple will introduce iOS 18 with heavyweight AI features at this year's WWDC in June. Developers have discovered technology codes related to large models in the developer preview version Beta of iOS 17.4. These codes indicate that Apple is developing a new version of Siri supported by large models. Some analysts consider iOS 18 to be one of the largest updates in Apple's history, if not the largest.

Affected by Kuo's latest report, Apple's stock price fell during trading, with a decline of over 2% at one point and a closing decline of nearly 2%. Apple's decline also dragged down the Nasdaq 100, which experienced a decline of nearly 0.7% on Tuesday. Apple became the first company to reach a market value of $3 trillion last year, but due to Microsoft's investment in Open AI, it has a clear advantage in the field of AI. Microsoft and Apple have been alternating on the throne of the "number one in the US stock market" in terms of market value.

At the beginning of this year, Apple experienced a series of setbacks. First, it was downgraded by investment banks twice in one week, causing its market value to evaporate by $160 billion in three days. Then, it faced the threat of antitrust litigation, causing its stock price to fall by about 5% in one week. However, the release of the new product Vision Pro turned the tide. Priced at $25,000, it was instantly sold out, and Apple's stock price reached a new all-time high during the trading day.

On Thursday, February 1st, Apple will release its earnings report after the US stock market closes. Analysts believe that Apple's performance in the first quarter of the fiscal year usually determines the strength of the latest demand cycle for Apple products. If the company's total revenue returns to year-on-year growth, it will undoubtedly leave a deep impression on investors in a challenging macroeconomic environment, as it indicates that its new products are popular among users.

In sharp contrast to Apple's smartphone shipments is Samsung. Guo Mingji recently stated that due to the better-than-expected demand for the highly integrated generative AI features, Samsung has raised its shipment forecast for the Galaxy S24 series in 2024 by 5-10%.