Apple Warns Investors Future Products May Not Match iPhone’s Profitability

Apple has cautioned investors that new markets such as artificial intelligence (AI) and virtual reality (VR) may not achieve the same success as its iPhone business.

In its latest annual report, Apple indicated that new offerings could bring lower profits and revenues. The company also highlighted the impact of “geopolitical tensions” and safety risks associated with AI features. Financial Times

Apple is heavily investing in AI to compete with rivals like Google and Meta and has recently launched new “Apple Intelligence” features. Despite these innovations, Apple’s Vision Pro headset has seen limited sales, and there are uncertainties regarding the monetization of its AI services. Regulatory pressures, particularly from the EU and U.S. antitrust rulings, pose further challenges. Recently, Warren Buffett’s Berkshire Hathaway reduced its stake in Apple significantly. Although Apple reported a revenue increase and sustained high gross margins, the uncertain future profitability of new product categories raises concerns about maintaining these margins.