The company has issued a warning about potential lower future profitability to investors.
Future Apple products may not bring as much profit as the iPhone business and its related services, the company has told investors.
In an annual filing addressed to the Securities and Exchange Commission, the company mentions the profitability of its future services along with other potential risks, such as macroeconomic conditions.
“New products, services, and technologies may replace or supersede existing offerings and may produce lower revenues and profit margins, which can materially adversely impact the company’s business, results of operations and financial condition,” Apple said.
While it’s usual to list potential risks, such as ones stemming from the macroeconomic environment, competition, and other factors, the Financial Times notes that this is the first time Apple has addressed the financial profile of its future products.
The company is currently pursuing new revenue streams, such as virtual reality and artificial intelligence.
Apple launched its AI features last week but for now, it’s unclear how it will earn from them. The company is considered to be behind its competitors.
Meanwhile, Apple's virtual reality device, Apple Vision Pro, which is priced at $3,500, didn’t attract mainstream interest.
iPhone sales typically make up around 50% of the company's revenue. Even though sales of iPhone 16 got off to a slow start, with some insider information indicating that preorders sales were down by 12.7%, overall demand is increasing.
The company's annual quarterly announcement said that its overall sales and iPhone 16 sales grew by 6%, which indicates strong iPhone 16 demand.
Apple's gross margin has increased in the past two decades and now amounts to over 40%.
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