Apple is Falling Behind

and it's not just in the world of generative AI

Brandon Butch
August 04, 2023

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Good morning! ☀️ *Tim Cook voice*

Apple’s Q3 earnings aren’t great, iOS 17 re-releases, Apple is falling behind, and more!

Estimated reading time: 3.4 minutes

📊 Poll

Last week, I asked: what is your battery capacity?

I’m at 91% on my 14 Pro

Here were some of my favorite replies:

“87%, It's so annoying how fast battery capacity drops soon after buying my device.” Oof, I hope that’s not a 14 series..

“iPhone 12 on 84%. It's probably just because I use my phone too much, but I've definitely been noticing my phone running out a little too quickly” Yep, about time to replace that battery/phone.

“My iPhone Xs is on 88% but I have had it since 2019 👍🏻” Impressive!

This week: Do you charge your iPhone overnight? Why or why not?

Do you charge overnight?

🫠 Apple is Falling Behind

Last month, Mark Gurman mentioned that Apple is internally testing a generative AI chatbot and that they could make a “significant AI-related announcement” in 2024.

But according to Ming-Chi Kuo, there’s no sign of that coming next year. He said this:

The progress of Apple’s generative AI is significantly behind its competitors, so I don’t expect Apple to talk too much about AI on the earnings call.
At present, there is no sign that Apple will integrate AI edge computing and hardware products in 2024

However, during Apple’s Q3 earnings call on Thursday, Tim Apple gave us some reassurance that Apple isn’t as behind as it seems.

We’ve been doing research across a wide range of AI technologies, including generative AI, for years. We’re going to continue investing and innovating and responsibly advancing our products with these technologies to help enrich people’s lives.

Obviously, we’re investing a lot, and it is showing up in the R&D spending that you’re looking at.

Tim Cook

iPhone 15 hype is also falling

In this same report, Kuo mentions that iPhone 15 demand is expected to be even lower than that of the iPhone 14, despite the switch to USB-C.

Although the Q422 iPhone shipments had declined due to the shutdown of Hon Hai’s Zhengzhou factory in November 2022, most component shipment plans didn’t change significantly in 4Q22.
Unless the demand for the iPhone 15 is better than market expectations after launch, most of the suppliers will face growth pressure in 2H23 as the demand for iPhone 15 is lower than that of iPhone 14.

And Kuo also reiterates that the 2024 shipment forecast for the Vision Pro headset is still quite small, so it’s unlikely to play a role in Apple’s stock price.

Apple’s Fall iPhone Event

9to5Mac just reported a potential date for Apple’s upcoming Fall event where they will introduce the iPhone 15 lineup. It’s a pretty obvious guess based on history (it’s the same date I predicted back in January), but still good to see some trusted rumors finally coming.

Multiple sources told 9to5Mac that mobile carriers have been asking employees not to take days off on Wednesday, September 13th due to a major smartphone announcement
Last year’s iPhone event was held on September 7th, which is also a Wednesday
If this date is accurate, expect pre-orders to begin on Friday, September 15th and a launch on September 22nd
Keep in mind, the Pro models might be delayed, so that release date is still up in the air for now

😳 Apple’s Q3 Earnings are Meh.

Apple just announced their fiscal Q3 2023 earnings and while analysts predicted a very disappointing quarter, the actual results weren’t terrible..but also not good.

Apple’s Q3 revenue of $81.80 billion was down 1% from last year, making this the 3rd consecutive quarter of lower year-over-year revenue - the first time since 2016.

The good news? Services are growing at 8% YoY, and that is the highest margin product Apple offers.

Are you invested in AAPL stock? Vote in the poll below and let me know if you plan on selling any time soon

Are you invested in AAPL stock?

📲 iOS 17 Re-Release, Downgrades, Screen Time & More

Apple has acknowledged that Screen Time is still broken despite claiming to have fixed it in iOS 16.5 (it was even in those release notes).

The bug consists of restrictions being lifted on devices in a Family Sharing group without the parent being notified.
This still persists in the latest iOS 17 Beta

As a side note: Chinese regulators just recently proposed rules that would limit the screen time for those under the age of 18 to a maximum of 2 hours per day. That’s one way to fight social media addiction!

AirTags 2

Ming Chi Kuo has said that the 2nd generation of AirTags will likely go to mass production in Q4 of 2024.

I believe that spatial computing is a new ecosystem that Apple wants to build, using Vision Pro as the core to integrate other devices, including AirTag 2.

Kuo

iOS 17 Re-Release & iOS 16 Downgrades

iOS 17 Beta 4 was re-released for Developers this week in order to line up the build number with iOS 17 Public Beta 2
Apple also stopped signing iOS 16.5.1, meaning that you can no longer downgrade to that version

📰 Quick News Bites

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Until next week, ✌️

- Brandon

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