Customers line up to enter an Apple store as the iPhone 14 series goes on sale in Shanghai on Sept. 16, 2022.
VCG | Visual China Group | Getty Images
A month after Apple’s latest iPhones came out, analysts and investors are starting to see signs of slow demand in China versus last year’s models.
Sales of Apple’s iPhone 15 models in their first 17 days are down 4.5% in China versus last year, according to an estimate from Counterpoint Research. Unit sales of the higher-end Pro Max and Pro are down 14% and 11% versus last year, according to the estimate.
Wall Street analysts also point to shorter shipping times on Apple’s website, suggesting that either demand has fallen, or supply has greatly increased. Jeffries analysts say “weak demand” in China has knocked Apple off the top spot for smartphone market share in the country.
China is Apple’s third-largest market after North America and Europe, and the apparent sluggish start comes after a few news stories that have some analysts fretting over the iPhone maker’s outlook in the country.
Huawei has returned to the high-end smartphone market in China after a few years where it was mostly absent, as U.S. trade restrictions made it hard to get certain parts necessary for building phones.
Last month, some Chinese government agencies reportedly banned iPhones for work, raising questions about Apple’s brand in the country.
Apple CEO Tim Cook is spending time in China this week, his second visit of the year. He’s visiting Apple stores, suppliers and Chinese officials. Apple also released a new iPad model this week specifically for China that works with the country’s carriers.
It’s a tough smartphone market for everyone. Smartphones sales are down around the world, on pace for the lowest shipment total in a decade, and they’re specifically down in China because of macroeconomic concerns.
“Apple, we suspect, could be down five-ish percent — and the China market is down at least 5%,” Counterpoint research director Jeff Fieldhack told CNBC. “It’s basically holding serve in a down market.” He stressed that U.S. demand, according to Counterpoint’s data, is strong and is making up for some of the Chinese shortfall.
All eyes on the holiday quarter
Investors are eager to see Apple return to growth this holiday season after three-straight quarters of declining overall sales. Data points from Apple officials in July point to falling growth yet again in the quarter ending Sept. 30.
Apple will reveal its September quarter results Nov. 2, and executives will likely give some data points about how the holiday quarter is firming up, and whether it’s returning to growth. The holiday season is Apple’s busiest of the year, and the first full quarter to include iPhone 15 sales. The September quarter only included a few days where the latest iPhones were sold.
Analysts often use shipping times — or how many days Apple is estimating it will take to ship a new iPhone — on Apple’s website to infer demand. These wait times are lower across the board than they were a year ago, especially in China, according to recent analyst notes from UBS, JPMorgan and Bank of America.
Bank of America analysts say the lower ship times reflect improving supply, not slipping demand.
But that’s at odds with Morgan Stanley analyst Erik Woodring, who said the bank is slashing its December quarter estimates and target price for the stock because it believes that limited supply will push some iPhone sales to the first quarter of 2024.
Adding to the concern among investors is that Apple’s other products won’t make up any iPhone shortfall. Apple’s Mac and iPad lineups haven’t gotten a major update yet this year. New models usually stoke demand, and the Chinese iPad announced this week was a very minor update. TFI Securities analyst Ming-Chi Kuo says MacBook sales could crater as much as 30% in 2023 versus last year.
One event that could signal how well Apple is doing in China is “Singles’ Day,” a major shopping holiday taking place Nov. 11, where iPhones will likely be slightly discounted to boost sales.
“That’s a big deal. They do a lot of sales and that will be a good harbinger of what the Q4 will be in China,” Fieldhack said.
Sundar Pichai, CEO of Alphabet Inc., during Stanford’s 2024 Business, Government, and Society forum in Stanford, California, April 3, 2024.
Justin Sullivan | Getty Images
Google is going to spend $10 billion more this year than it previously expected due to the growing demand for cloud services, which has created a backlog, executives said Wednesday.
As part of its second quarter earnings, the company increased its forecast for capital expenditures in 2025 to $85 billion due to “strong and growing demand for our Cloud products and services” as it continues to expand infrastructure to power more AI services that use its cloud technology. That’s up from the $75 billion projection that Google provided in February, which was already above the $58.84 billion that Wall Street expected at the time.
The increased forecast comes as demand for cloud services surges across the tech industry as AI services increase in popularity. As a result, companies are doubling down on infrastructure to keep pace with demand and are planning multi‑year buildouts of data centers.
In its second quarter earnings, Google reported that cloud revenues increased by 32% to $13.6 billion in the period. The demand is so high for Google’s cloud services that it now amounts to a $106 billion backlog, Alphabet finance chief Anat Ashkenazi said during the company’s post-earnings conference call.
“It’s a tight supply environment,” she said.
The vast majority of Alphabet’s capital spend was invested in technical infrastructure during the second quarter, with approximately two-thirds of investments going to servers and one-third in data center and networking equipment, Ashkenazi said.
She added that the updated outlook reflects additional investment in servers, the timing of delivery of servers and “an acceleration in the pace of data center construction, primarily to meet Cloud customer demand.”
Ashkenazi said that despite the company’s “improved” pace of getting servers up and running, investors should expect further increase in capital spend in 2026 “due to the demand as well as growth opportunities across the company.” She didn’t specify what those opportunities are but said the company will provide more details on a future earnings call.
“We’re increasing capacity with every quarter that goes by,” Ashkenazi said.
Due to the increased spend, Google will have to record more expenses over time, which will make profits look smaller, she said.
“Obviously, we’re working hard to bring more capacity online,” Ashkenazi said.
The SK Hynix Inc. logo is displayed on a glass door at the company’s office in Seoul, South Korea, on Monday, Jan. 27, 2014. SK Hynix aims to select a U.S. site for its advanced chip packaging plant and break ground there around the first quarter of next year.
SeongJoon Cho | Bloomberg | Getty Images
South Korea’s SK Hynix on Thursday posted record operating profit and revenuein the second quarter on sustained demand for its high bandwidth memory technology used in generative AI chipsets.
Here are SK Hynix’s second-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate:
Revenue: 22.23 trillion won ($16.17 billion) vs. 20.56 trillion won
Operating profit: 9.21 trillion won vs. 9 trillion won
Revenue rose about 35% in the June quarter compared with the same period a year earlier, while operating profit rose nearly 69%, year on year.
On a quarter-on-quarter basis, revenue rose 26%, while operating profit jumped 24%.
The company said in a statement that it enjoyed strong demand and favorable pricing conditions in the first half of the year. SK Hynix added that there was a low likelihood of sharp demand corrections for the rest of 2025, due to stable customer inventory levels and expected demand from new product launches.
SK Hynix is a leading supplier of dynamic random access memory — a type of semiconductor memory commonly found in PCs, workstations and servers that is used to store data and program code.
Much of the company’s recent success can be credited to its business in high bandwidth memory, or HBM — a type of DRAM used in artificial intelligence servers.
SK Hynix has established itself as the global leader in HBM, supplying clients such as U.S. AI darling Nvidia. In the first quarter, this had seen the company overtake rival Samsung Electronics in the global DRAM market for the first time, according to Counterpoint Research.
A report from Counterpoint Research earlier this month estimated that SK Hynix had tied Samsung’s combined DRAM and NAND revenues in the second quarter, with both vying for the top position in the global memory market. NAND is a type of flash memory that is commonly used in storage devices.
Samsung and US.-based memory maker Micron Technology are both seeking to catch up to SK Hynix in the HBM space. However, analysts expect SK Hynix’s dominance to persist in the short-term.
“As of now, I believe SK Hynix still holds its leadership in the HBM race … despite Samsung’s and Micron’s catch‑up efforts,” said Ray Wang, research director of semiconductors, supply chain and emerging technology at The Futurum Group.
“I expect this edge to persist through the rest of 2025 and extend into 2026,” he added.
IBM CEO Arvind Krishna appears at the World Economic Forum in Davos, Switzerland, on Jan. 16, 2024.
Stefan Wermuth | Bloomberg | Getty Images
IBM shares fell as much as 5% in extended trading on Wednesday after the tech conglomerate issued second-quarter results that topped Wall Street projections.
Here’s how the company did in comparison with LSEG consensus:
Earnings per share: $2.80 adjusted vs. $2.64 expected
Revenue: $16.98 billion vs. $16.59 billion
IBM’s revenue increased nearly 8% year over year in the quarter, according to a statement. Growth in the first quarter was below 1%. Net income, which includes costs related to acquisitions, rose to $2.19 billion, or $2.31 per share, from $1.83 billion, or $1.96 per share, a year ago.
Software revenue climbed about 10% to $7.39 billion, exceeding the $7.43 billion consensus among analysts surveyed by StreetAccount. Hybrid cloud revenue, including Red Hat, showed 16% growth. The software unit’s gross margin of 83.9% was barely narrower than StreetAccount’s 84.0% consensus.
Revenue from consulting rose almost 3% to $5.31 billion, higher than StreetAccount’s $5.16 billion consensus. Infrastructure revenue went up 14% to $4.14 billion, above the $3.75 billion StreetAccount average estimate.
During the quarter, IBM announced the next-generation z17 mainframe computer and the acquisition of data and artificial intelligence consulting firm Hakkoda.
IBM called for over $13.5 billion in 2025 free cash flow, similar to a projection from April. The company still sees at least 5% revenue growth at constant currency for the year.
As of Wednesday’s close, IBM shares were up 28% so far in 2025, while the S&P 500 index has gained around 8% in the same period.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
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