Apple CEO's First Earnings: Can New Gadgets Beat Chip Costs?

Apple's new CEO, John Ternus, will host his first earnings call on Monday, with investors keen to assess the company's performance and future outlook. The focus will be on whether a recent wave of new products can counteract rising memory chip costs.

Ternus, who assumed leadership in September, has overseen the launch of Apple's first foldable phone, smart home hub, and touch-screen laptops. These devices began shipping during the company's fiscal first quarter, a period marked by significant increases in memory costs.

Analysts anticipate scrutiny on three main fronts: the crucial holiday-quarter outlook, remarks concerning artificial intelligence and the revamped Siri, and the impact of escalating memory chip costs. These factors are expected to slow quarterly profit growth to its weakest pace in six quarters.

Apple's strategy in AI is being positioned differently from rivals, emphasizing accessibility for 'everyday people' over cutting-edge models. Investors are also interested in potential revenue streams from distributing third-party AI agents via the App Store.

Despite these challenges, Apple's shares have performed well, rising approximately 27% this year, as investors seek stability. The company is expected to report an 11% revenue increase to $113.39 billion for its fiscal fourth quarter.

Growth in Apple's services business is projected to slow to nearly 10%, its lowest in over three years. iPhone sales are anticipated to climb about 15%, though this includes only a brief period of sales for the new iPhone 18 Pro models.

The recently launched foldable iPhone Duo, priced at $1,999, has encountered issues with display cracks along the central fold. Despite these early problems and long delivery waits, demand for the Duo is expected to remain strong.