Gurman Weighs In On Apple’s Overflowing Cup Of Challenges: Late Arrival To AI Party, App Store Regulatory Headwinds And More

Apple, Inc. (NASDAQ:AAPL) shares came under selling pressure in the new year after a couple of analysts tempered their outlook for the tech giant. The view was echoed by Bloomberg’s Mark Gurman in his weekly ”Power On” newsletter published on Sunday.

iPhone Sales Stutter: Apple’s year-over-year sales decline is likely to extend to five quarters, with the company likely reporting another quarter of revenue decline, said Gurman in the report. If it does, it would mark the second consecutive holiday quarter with a revenue drop, he said.

Wall Street’s fears about weak iPhone sales this year could compound if Apple reports below-consensus revenue in China for the holiday quarter, the Apple specialist said.

Apple CFO Luca Maestri’s comments on the September quarterearnings callsuggest iPhone sales during the holiday quarter will likely be only marginally stronger than a year ago, Gurman said, adding that the muted expectation is despite the iPhone 14 Pro sales getting hit by COVID-19 supply disruptions a year ago.

Even as iPhone sales, particularly in the key China market, remain a concern, Gurman said the company’s flagship device is unlikely to be its biggest challenge this year.

See Also: Everything You Need To Know About Apple Stock

Bigger Challenges Await: Gurman does not expect a material update with respect to the next iPhone iteration, namely the iPhone 16, but he expects Apple marketers to make ”slightly bigger screens sound like the biggest innovation since the original iPhone.”

Shrugging off the iPhone softness, the columnist outlined some of Apple’s biggest challenges ahead. They include:

Falling way behind competition in generative artificial intelligence
The Vision Pro headset unlikely becoming a real revenue driver for at least the next year and more
Challenges associated with revitalizing the iPad and Mac, which have been underperforming in recent quarters
Antitrust regulators continuing to scrutinize App Store

Late To AI Party: Apple’s AI tools may come nearly two years after OpenAI’s ChatGPT became popular, a year and a half after Microsoft Corp. (NASDAQ:MSFT) and Alphabet, Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) launched their respective AI services and a year after Amazon, Inc. (NASDAQ:AMZN) announced its revamped Alexa, Gurman said.

Apple expects to…