Is Apple’s Big Week of Announcements a Pre-Earnings Smokescreen?
More signs point to the March 2025 quarter as the real start of the iPhone upgrade cycle.
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Today kicks off what is going to be considered a big week for Apple AAPL as we approach its September-quarter earnings report after Thursday’s market close. We gamed that report out in Friday’s Daily Rundown video, and nothing has emerged to change our thinking since then. And yes, the chorus of mixed messages from Wall Street firms has continued, with JPMorgan suggesting Apple could guide below consensus for the current quarter even though iPhone 16 volumes are in line with those for iPhone 15 this time last year. Wedbush remains a perma bull on Apple, continuing to focus on the approximate 300 million iPhones that are as it put it, “in the window of an upgrade opportunity”.
Besides a quarterly earnings report that will grab the attention of most investors simply because it’s the largest holding in both the S&P 500 and the Nasdaq Composite, Apple also released its first software update containing some Apple Intelligence features. The company also began what is expected to be a mini-wave of Mac announcements this week by introducing its new M4-powered iMac.
This iMac announcement is billed as the first of “three exciting new product announcements” this week with the other two widely expected to be a refreshed Mac mini and an M4 MacBook Pro. These announcements continue a product refresh started earlier this year and update the offering with powerful hardware as Apple looks to bring more features to Apple Intelligence later this year and next year.
With that let’s discuss what’s in today’s software update and its initial Apple Intelligence features:
- Writing Tools, which helps you with Rewrite, Proofread, or Summarize features.
- Smart Replies — quick AI-generated messages based on the context of the conversation.
- Summaries to get an overview of webpages, notifications, messages, and other apps.
- Clean Up and the real-time transcribing capabilities in the Phone, Notes, and Voice Memo apps.
These are nice to have, in my view, but as I mentioned in Friday’s video, Apple has also ceded its iOS 18.2 beta to developers and when released this brings features to Apple Intelligence that could spark the iPhone upgrade cycle:
- Image Playground, which lets you call on AI to generate images from text.
- Genmoji, to create new emojis from text.
- Visual Intelligence, which can identify what's in front of you and provide related context
- The ability to pass Siri requests off to ChatGPT, which has the potential to make Siri far more useful than it has been.
As I get access to iOS 18.2 via Apple’s beta program, I’ll be sure to share my reactions to all of these and how they could influence iPhone upgrade expectations.
One Final Thought on Apple This Week
In the past from other companies, when we’ve seen a wave of announcements right before a company delivers its quarterly earnings and updated outlook, more often than not, it tends to precede a lackluster earnings report to soften the reaction for what’s to come.
Could this be the case with Apple? Possibly.
Comments we shared last week from AT&T T and Verizon VZ suggest the much-expected iPhone upgrade cycle has yet to emerge. Later in the week, T-Mobile TMUS shared that current upgrade rates “were low.”
It would seem that more folks than not are in a wait-and-see mode when it comes to Apple Intelligence. Today’s release is what I would call “nice to have” but it is iOS 18.2 that could kick-start the upgrade cycle. As of now, that software update isn’t expected to be released until December, possibly the second week of December. If that timing is accurate, it suggests the real start of the upgrade cycle will be a March 2025 event.
Should we see Apple’s September-quarter results or guidance underwhelm Wall Street later this week, depending on the pullback in the stock it could bring an opportunity for us to scoop a few more up for the portfolio ahead of what we described above.
A quick glance at the stock’s technicals, shows support near $227 (50-day moving average), again at $222 (100-day), and near $201 (200-day). Ahead of Apple’s earnings report after Thursday’s close, we’ll have a much deeper dive on the technical setup heading into that report.
At the time of publication, TheStreet Pro Portfolio was long AAPL.
