Apple worries about its future: iPhone successor could 'produce lower revenues and profit margins'

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Today, Apple is doing well. The Cupertino company has just announced a record fourth fiscal quarter. And it is gradually rolling out its Apple Intelligence features that should stimulate demand. But despite this apparent success, the future of the company is uncertain. Indeed, despite its diversification efforts, Apple is too dependent on revenue generated by the iPhone. For example, during its fourth fiscal quarter, the company generated $94.9 billion, of which $46.2 billion came from the iPhone.

Apple is well aware of this problem. And that’s what’s driving the company to explore new markets. At one point, it was interested in electric cars, but ultimately abandoned that project. This year, Apple also took its first steps into the mixed reality market, launching the Vision Pro headset. And Apple is also rumored to be developing smart home displays. However, while it’s looking to develop new product categories, Apple is aware that it won’t necessarily be able to replicate the success of the iPhone.

And this concern is raised in an annual report sent to the SEC, the American stock market regulator. “New products, services, and technologies may replace or supplant existing offerings and may result in lower revenues and profit margins, which could have a material adverse effect on the Company’s business, results of operations, and financial condition,”, the report reads in the risk factors section.

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Apple Admits Its AI Can Be Wrong

Otherwise, the document also mentions the new risks to which Apple is exposed, with the arrival of generative artificial intelligence on its products. “The introduction of new and complex technologies, such as artificial intelligence functions, may increase these and other security risks, including by exposing users to harmful, inaccurate or negative content and experiences”, Apple admits.

As a reminder, if generative AI models can considerably increase user productivity, these models can also “hallucinate” and produce responses that include inaccurate information. Moreover, services that rely on generative AI generally display warnings asking the user to carefully verify the information.

• Apple is doing well, having recently announced record results for its fourth fiscal quarter
• But the company admits that it may not be able to replicate the success of the iPhone, which is currently its main source of revenue
• Apple also admits that its new AI-based features may give users inaccurate information

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