What to watch for in Apple earnings: iPhone 16, AI

Apple (AAPL) is scheduled to report its quarterly earnings results on Thursday, October 31st. IDC Research Director Ramon T. Llamas joins Seana Smith and Madison Mills on Catalysts to discuss what he’s looking for in the earnings report, including insight into iPhone 16 reception and updates on the Apple Intelligence rollout.

“We’re still at the very beginning of the iPhone 16,” Llamas tells Yahoo Finance. “There are many things that make iPhone 16 truly wonderful. I mean, one of them is the camera, a lot of it is the interface. But you also have to remember that people are taking longer to replace their phones than they used to.” The lengthening upgrade cycle has contributed to concerns about demand.

Llamas says he looks for three things when a company launches a new tech product: convenience, ease of use and usefulness. “First and foremost is convenience. Does it make my job easier or does it make my life much easier than it used to be? Do I just have to do one click or do I have to go through five clicks? So that really helps. Second, will it just be very intuitive? Will this be something I don’t really have to think about? I can almost do it blindfolded. Will it be that easy? The third thing I’m really looking for is how is this going to benefit people’s lives?” As Apple’s artificial intelligence (AI) features come to market, “there’s adoption, then there’s usage, then there’s sustainability Usage,” Llamas notes, saying he will use his three-things framework to assess where Apple is on this journey.

He says: “The biggest issue” in the report is the iPhone, and the second is services. The iPhone “accounts for about 67 to 70% of total sales every time you look at it,” while the services sector “is almost literally printing money.”

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This post was written by Naomi Buchanan.