Apple Inc. is under growing pressure from investors to provide clear guidance on its artificial intelligence (AI) strategy and how it plans to manage the looming threat of U.S.-China tariffs, as iPhone sales continue to slip. The tech giant is expected to address these concerns when it reports quarterly earnings on Thursday.
Despite a temporary boost in demand for the recently launched lower-priced iPhone 16e during the January to March quarter, analysts forecast a slight decline in overall iPhone sales. If confirmed, it would mark the second consecutive quarter of falling sales for Apple’s flagship product. This comes at a time when Apple’s global market share is under threat, particularly in China, where domestic rivals like Huawei are gaining ground, partly due to stronger AI integration in their devices.
AI is expected to be a key battleground for smartphone makers, and investors are growing impatient over Apple’s delayed rollout of new AI features. The company has remained relatively quiet while competitors such as Google and Samsung have aggressively pushed AI-driven functions, raising concerns that Apple may be falling behind in this critical area.
Adding to the uncertainty is the geopolitical tension between the U.S. and China. While the Trump administration has so far spared consumer electronics from tariffs, the Biden administration has hinted at possible levies in the near future. Such a move could further strain Apple, which manufactures about 90% of its products in China. The resulting uncertainty has dragged Apple’s stock down by over 16% this year, wiping out more than $600 billion in market value.
To cushion the impact, Apple is reportedly shifting some iPhone production for the U.S. market to India. Analysts also expect the company to distribute tariff-related costs across its supply chain while avoiding major price hikes, in an effort to retain its competitive edge.
“Tariffs are a sword of Damocles for Apple dangling, disruptive and politically charged,” said Eric Schiffer, chairman of the Patriarch Organization. As investors brace for Apple’s earnings report, all eyes will be on whether the company can restore confidence amid these mounting challenges.
