For the first time, Apple head Tim Cook has peppered his narrative with the term ‘generative AI,‘ stepping aside from the usual ‘machine learning‘ lingo that is pretty common in all Apple conferences.
Against the backdrop of this linguistic jump, Apple has reported a revenue of $89.5 billion for the September quarter, clinching all-time highs in India and setting records in an array of countries from Brazil to Vietnam. However, this quarter is not without its shadows as it marks the fourth consecutive period of a revenue drop, with a year-over-year decrease of 1%.
In the broader context of generative AI, Apple regarded these technologies as the bedrock for the vast majority of their products. “This was exemplified with the launch of iOS 17, which featured innovations such as Personal Voice and Live Voicemail, all underpinned by AI,” said Tim Cook, CEO, of Apple, during the Q3 earnings call.
“Regarding generative AI, we have ongoing projects. I won’t delve into specifics, as our policy is to keep development details confidential but rest assured we are heavily invested in this area. We are committed to responsible innovation, and you’ll see our products progressively integrate these technologies at their core,” Cook added.
Moreover, Apple’s foray into AI is not merely for consumer convenience but also extends to safety-critical applications. Features such as fall detection, crash detection, and the ECG functionality on the Apple Watch, while not overtly marketed as AI-powered, are indeed built upon a bedrock of AI and machine learning.
Parallel to AI ventures, the tech giant’s iPhone revenue surpassed expectations, marking a record for the September quarter and attaining quarterly records in several markets such as China Mainland, Latin America, the Middle East, South Asia, and an unprecedented all-time high in India.
“Despite facing a turbulent macroeconomic climate marked by significant foreign exchange challenges, we have maintained its course by investing in the future and adopting a long-term management perspective, staying true to the principles that have historically steered our success,” said Cook.
The company has recently broadened its retail footprint by inaugurating its first stores in India and opening additional outlets in Korea, China, and the UK. Apple also expanded its online store services to Vietnam and Chile and is on the verge of opening yet another store in China.
Apple is nearing $10 billion in revenue in India. “India represents a vibrant and rapidly expanding market where we have recorded strong double-digit growth and achieved an all-time revenue record,” Cook added.
With a relatively low market share in this large market, Apple sees significant headroom for growth. While the average selling price (ASP) in India may be lower compared to the global average, Apple does not view this as a deterrent. The company regards each market’s trajectory as unique and resists drawing direct comparisons to other markets, such as China’s growth patterns a decade earlier.
The expansion of the middle class and improvements in distribution channels are among the positive indicators Apple has identified in India. The company’s two new retail stores in India have performed better than anticipated, and although it is the beginning of their journey, they are off to a strong start, which aligns with Apple’s overall satisfaction with its current trajectory in the region.
In addressing queries about supply chain priorities, Apple acknowledges the importance of diversification in its supply chain strategies. By continually assessing and adjusting its supply chain, Apple aims to maintain efficiency and adaptability in its operations worldwide.
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