Apple's AI-Powered iPhone: A Strong Start Amidst Challenges

Apple's AI-enhanced iPhone boosted sales above expectations, yet future revenue growth concerns persist due to a modest holiday forecast and a decline in China sales. Despite the uncertainty, Apple's services business anticipates double-digit growth and increased capital expenditures to support its AI strategy.

Apple's latest AI-boosted iPhone has surged sales beyond Wall Street expectations, yet future revenue growth looks uncertain. A cautious holiday season forecast and weakened sales in China have raised red flags for analysts and investors, leading to a 1.4% dip in Apple's shares during after-hours trading.

CFO Luca Maestri projected a 'low to mid single digits' revenue growth for the fiscal first quarter, diverging from the anticipated 6.65% growth. While questions linger about the sustainability of hardware sales, Apple's services division is poised for double-digit growth.

Despite delays in some AI features, Apple's new iPhone models leverage enhanced capabilities, reflecting the company's strategic shift towards integrating AI into operating systems. The rollout of Apple Intelligence marks a pivotal chapter in Apple's competitive edge against rivals focusing on AI advancements.

(With inputs from agencies.)