Apple admits that future products may never be as profitable as the iPhone

Apple has warned investors that its next batch of new products may never be as profitable as the iPhone.

The company issued the warning in a recent securities filing as part of a list of “risk factors” that could weigh on the business.

Apple, which was recently replaced by AI chipmaker Nvidia as the world’s most valuable company, last week reported a 6% rise in revenue for the most recent quarter, although it said it expects weaker growth during current quarter.

“New products, services and technologies may replace or replace existing offerings and may produce lower revenues and lower profit margins, which could adversely affect the company’s business…,” Apple said in September . 28 filing with the Securities Commission.

Apple’s warning was contained in its most recent regulatory filing 10-K — an annual report on a company’s finances that publicly traded companies must file with the SEC.

In years past, Apple was not as forthright in its 10-K filing when discussing new products and their potential profitability, according to the Financial Times.

Instead, the company referred to new product introductions as “higher cost structures.”

Apple also said in the filing that it was keeping an eye on “geopolitical tensions” that could potentially affect sales.

The Cupertino, California-based company has been investing in AI in an effort to catch up to tech rivals like Google and Meta.

Fourth-quarter sales of Apple’s iPhone, the company’s flagship product, rose 5.5% to $46.22 billion, compared with analysts’ estimates of $45.47 billion. Other product lines missed expectations.

Apple’s fourth fiscal quarter ended in September. 28, meaning it reflects just a few days of sales of its iPhone 16 series that went on sale in September. 20.

Apple Chief Executive Tim Cook told Reuters that sales of the iPhone 16 grew faster than sales of the iPhone 15 a year ago, with both phones on sale for the same number of days in the fourth quarter.

The rollout of Apple’s artificial intelligence strategy, which it unveiled this year, depends on how well its new phones sell.

Rather than introducing AI into a standalone app or service, Apple has sprinkled Apple Intelligence throughout its latest operating systems as new features, such as the ability to help rewrite an email a ton more professional.

These features will mostly be available on the iPhone 16 models, which have more powerful computing chips, although the iPhone 15 Pro versions both work with Apple Intelligence.

Sales in Apple’s services business, which includes iCloud storage and Apple Music, were $24.97 billion, compared with analysts’ expectations of $25.28 billion, according to LSEG.

Mac and iPad sales were $7.74 billion and $6.95 billion, respectively, compared with estimates of $7.82 billion and $7.09 billion, according to LSEG data.

Sales in Apple’s home and wearables business, which includes its Apple Watch and AirPods devices, fell to $9.04 billion, compared with estimates of $9.2 billion, according to LSEG.

By postal wire