Apple’s iPhone 16 is facing a challenging start, with pre-order numbers anticipated to be lower than expected.
This early setback has led to a nearly 3% drop in Apple’s stock price today.
Analysts, including Ming-Chi Kuo from TF International Securities, project that pre-orders for the iPhone 16’s first weekend will reach approximately 37 million units.
This figure represents a 12.7% decline compared to the previous year, highlighting a notable dip in demand for Apple’s latest flagship device.
Apple stock’s dip: lack of AI innovation?
The decreased demand can be attributed to several factors, particularly Apple’s lag in artificial intelligence (AI) innovation.
While other tech giants are advancing rapidly in the AI sector, Apple has yet to make a significant impact.
The company traditionally invests in developing proprietary technologies to integrate into its ecosystem, but its efforts in AI have not yielded a standout product.
Training AI models for generative applications requires substantial resources, and Apple’s reluctance to invest heavily in this area could be hindering its progress.
Apple’s weakness in China
Currently, Apple relies on OpenAI’s technology to provide AI features in its new iPhones.
However, geopolitical factors complicate this reliance.
The Chinese government restricts foreign AI companies from operating without state approval, creating additional challenges for Apple.
The lack of AI capabilities in iPhones sold in China is a significant setback, especially given the rapid advancements by local competitors like Huawei.
Apple’s absence from the top five smartphone sellers in China for the first time underscores the impact of its AI shortcomings.
Why is Apple stock a buy at this stage?
Despite these challenges, there are reasons why Apple might still be a worthwhile investment.
The company’s short-term difficulties, including weaker pre-order numbers, could be part of a strategic plan.
Apple often withholds its most compelling features until the holiday season, capitalizing on increased consumer spending.
It’s plausible that the company will introduce enhanced AI capabilities in the coming months, potentially coinciding with the peak shopping period in November and December.
Investors should consider that Apple has a history of overcoming periods of weakness.
The company has bounced back from similar setbacks in the past, demonstrating resilience and an ability to recover.
If Apple can successfully roll out significant AI advancements and address its challenges in China, the stock could rebound strongly.
For now, the dip in Apple’s stock price might present a buying opportunity.
As always, investors should monitor the company’s performance during the holiday season and stay informed about any new developments in Apple’s product offerings and strategic initiatives.
Given Apple’s track record and potential for future growth, any current weakness in the stock could be an advantageous entry point for long-term investors.
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