Customers line up to enter an Apple store as the iPhone 14 series goes on sale in Shanghai on Sept. 16, 2022.
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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.
Salesforce CEO Marc Benioff speaks at the Dreamforce conference in San Francisco on Sept. 17, 2024.
David Paul Morris | Bloomberg | Getty Images
Salesforce is adding voice to its Agentforce software, letting clients go beyond text when using artificial intelligence agents to respond to customer questions.
With Agentforce Voice, companies can customize the tone and speed of voices and adjust the pronunciation of specific terms, Salesforce said Monday, ahead of its Dreamforce conference in San Francisco this week. The feature also allows people to interrupt the AI agent during phone calls.
Voice is becoming a bigger part of the generative AI boom, which started with text-based prompts in late 2022, when OpenAI launched ChatGPT. In the past year, OpenAI and Anthropic have enabled their chatbots to conduct spoken conversations without sounding overly robotic. Now that capability is taking hold inside business software.
Former Salesforce co-CEO Bret Taylor is also trying his hand in the market. Taylor helped start Sierra in 2023, and last year the startup announced that its AI agents “can now pick up the phone.” Sierra has been valued at $10 billion, and has a client list that includes ADT, SiriusXM and SoFi.
Salesforce has been under pressure this year in part due to investor concern that software companies could lose business as AI moves deeper into coding. The stock is down about 28% so far in 2025, while the Nasdaq has gained around 15% over that stretch.
Anthropic told reporters in September that its Claude Sonnet 4.5 model built a chat app similar to Salesforce’s Slack in 30 hours. In Salesforce’s latest earnings report, the company warned that new AI products “may disrupt workforce needs and negatively impact demand for our offerings.”
Salesforce CEO Marc Benioff has downplayed the risk to this company.
“When we get into this kind of zero-sum game, well, all this is going to get wiped out, or all this is going to change, then, you know, you’re not dealing with somebody who actually runs a company, because that’s not the way business works,” Benioff told CNBC’s Morgan Brennan last month. “Business is incremental, it’s evolutionary, it’s growing, it’s evolving, and we don’t see that kind of change.”
Salesforce launched Agentforce last year as a service that could respond to customer requests over text chats with help from generative AI models. Agentforce now has more than 12,000 implementations, according to a statement. But there’s some skepticism about its popularity.
“Investor enthusiasm around Agentforce has moderated as adoption has lagged expectations,” RBC Capital Markets analysts, who recommend holding the stock, wrote in a note to clients last week.
In November, Salesforce will provide early access to Agent Script software, which organizations can use to customize what agents say and do.
A SK Hynix Inc. 12-layer HBM3E memory chip displayed at the Semiconductor Exhibition in Seoul, South Korea.
Bloomberg | Bloomberg | Getty Images
Chip stocks bounced on Monday, clawing back losses from Friday’s market rout as OpenAI announced another computing deal with a major chipmaker and U.S.-China tensions eased.
Trump sent markets into a selloff on Friday after he threatened massive tariffs on China in response to the country’s latest clampdown on rare earths. He later pledged to levy new tariffs of 100% on China imports starting on Nov. 1 and would also impose export controls on “any and all critical software.”
The tech megacaps lost $770 billion in market cap on Friday.
Charlie Kawwas, president of the semiconductor solutions group at Broadcom, on Monday said that OpenAI is not the mystery $10 billion customer that it announced during its earnings call in September.
Kawwas appeared on CNBC’s “Squawk on The Street” with OpenAI’s President Greg Brockman to discuss their plans to jointly build and deploy 10 gigawatts of custom artificial intelligence accelerators.
The deal was largely expected after analysts were quick to point to OpenAI as Broadcom’s potential new $10 billion partner. But after the companies officially unveiled their plans on Monday, Kawwas said OpenAI does not fit that description.
“I would love to take a $10 billion [purchase order] from my good friend Greg,” Kawwas said. “He has not given me that PO yet.”
Broadcom did not immediately respond to CNBC’s request for additional comment.
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OpenAI has been on an AI infrastructure dealmaking blitz as the company looks to scale up its compute capacity to meet anticipated demand. The startup, which is valued at $500 billion, has inked multi-billion dollar agreements with Advanced Micro Devices, Nvidia and CoreWeave in recent weeks.
Broadcom does not disclose its large web-scale customers, but analysts have pointed to Google, Meta and TikTok parent ByteDance as three of its large customers. During its quarterly call with analysts in September, Broadcom CEO Hock Tan said a fourth large customer had put in orders for $10 billion in custom AI chips.
The order increased Broadcom’s forecast for AI revenue next year, which is when shipments will begin, Tan said during the call.
OpenAI and Broadcom have been working together for the last 18 months, and they will begin deploying racks of custom-designed chips starting late next year, the companies said Monday. The project will be completed by 2029.
“By building our own chip, we can embed what we’ve learned from creating frontier models and products directly into the hardware, unlocking new levels of capability and intelligence,” Brockman said in a release.