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iPhone 16 series drives Apple's Q4 revenue jump: Analysts predict 5.7% increase in China amid AI-driven “Super-Cycle” anticipation

Apple Inc. is expected to report on October 31 its highest quarterly revenue growth rate in two years, owing to high iPhone sales, especially in China. Preliminary forecasts by analysts expect the tech giant to post a 5.7% revenue rise for its fiscal fourth quarter, ending two consecutive quarters of revenue decline. The development is expected to come from the increase in sales, mainly from the newly released Apple iPhone 16 series just before the end of the period. iPhone sales are expected to rise by 3.8% with better end-of-the-year results as reflected in LSEG information.

The upcoming results will be the first to reveal consumer reaction to the new iPhone 16 series. It is unlikely, though, that attention will necessarily swing toward Apple's guidance for the holiday season, i.e., its fiscal first quarter. At the heart of the super cycle in the background of an AI-focused market, investors are drawing particular attention to Apple’s 'Apple Intelligence' AI, a feature deemed to fuel demand for Apple's products.

Nevertheless, Apple lags behind the likes of Samsung and Microsoft in AI releases, as the former aggressively is pushing for generative AI, while the latter has been seriously investing in AI development. Recently, Apple also unveiled "Apple Intelligence" to selected iPhone users in the United States and promised its rollout to Mac users throughout the European Union by April. Apple has not made any announcement about the integration of Apple Intelligence with iPhones in major international markets including Europe and China.

On the other hand, limited rollout has fueled analysts’ concerns. The staggered release is raising fears that consumer purchases may shift into the next fiscal year and cost holiday season revenue. Even so, some reporters still have faith in Apple’s prospects in the longer term concerning AI.

According to Toni Sacconaghi of Bernstein analyst, “The strength of the iPhone 16 cycle is the most important question heading into both the December quarter and FY25," Bernstein analyst Toni Sacconaghi said.” He further added, “Investors should expect Apple to be upbeat about iPhone 16 and Apple Intelligence, but it may or may not necessarily reflect the ultimate success of the cycle."

Apple said that iPhone sales in the Greater China market are expected to grow by 6.6%. And Apple, aided by a discount on some iPhone models, captured the second most in the market share in China, during the quarter. However, it is still in a great competitive market due to the likability of Huawei and other companies like Vivo, Xiaomi, and Honor.

Local news also reported that online seller Pinduoduo cut prices for some of Apple's iPhone 16 Plus by as much as 10%, a price Apple has not sanctioned.  Apple's services business, which consists of the App Store, is forecast to see its revenue rise 13.3%.

Even now, services revenue remains a key driver of growth, but it may have some hurdles. Concerns over Apple's App Store practices and possible rule changes have been raised by EU regulators since June when they accused the company of breaking the bloc's tech rules. The deal also puts Apple’s relationship with Google — the US default search engine across Apple’s devices — under scrutiny, a profitable piece of Apple’s business.

A recent ruling by Europe’s top court will also show up as a one-off income tax charge of around $10 billion in the company’s fourth-quarter financials. Its Q4 financial results will include a one-time income-tax charge of around $10 billion from the European Union's highest court. It was related to a decision against the firm from Apple in the company's ongoing tax case against Ireland that was delivered last month. iPad Business- The iPad business continued to be quite impressive and will also experience a rise of 10.1% for it to reach the figures of $7.09 billion. This happened after the previous quarter has sales grew by 23.7%, an introduction with improved models of the iPad.

Investors will pay close attention to Apple’s report because it will set the tone for the upcoming holiday season and beyond, with eyes on Apple’s AI developments, and iPhone demand. Apple has even more serious competition in both hardware and in AI where it must sustain consumer interest and meet investor expectations.