Apple (AAPL) is set to report fiscal fourth quarter earnings on Thursday, October 31, amidst a busy week of tech announcements. The iPhone maker launched its Apple Intelligence features on Monday through its iOS 18.1 software update
Investors are looking to see if the newly revealed Apple Intelligence will have a noticeable impact for the tech company. TECHnalysis Research president and chief analyst Bob O’Donnell joins Asking for a Trend to discuss.
“As of today, it’s Apple semi-Intelligence because we’re not quite totally there yet,” he explains. Despite rolling out features like Genmoji and text-writing capabilities, the company faces the same challenge as its competitors: “convincing consumers that this AI stuff matters.”
“Apple’s going to really have to convince consumers that there is value in this capability, and it’s going to take a long time,” O’Donnell states. He doesn’t anticipate seeing a significant AI impact in the company’s upcoming earnings report. However, he believes that over the long term, these AI features will enhance the usability of Apple devices, and it will “kind of sneak up on us.”
Watch the video above to hear what O’Donnell says about Big Tech’s capital expenditures on artificial intelligence.
To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here.
This post was written by Angel Smith
Video Transcript
Well, it is a big week for Apple.
The tech giant isn’t just set to announce Q four earnings on Halloween.
It’s also started rolling out the first of its Apple Intelligence features today and announced new IMAC joining us.
Now to discuss all this is Bob o’donnell tech Analysis research president and chief analyst, Bob.
It is always good to see you.
So wanna start on, on news here of Apple pushing out these new A I features Bob and you know, I was talking to uh Ben Beern today.
Um You know, like yourself smart guy, Bob thinks a lot about Apple and Ben was saying, you know, really the onus here is gonna be on Apple and I asked him what he meant by that and he said, you know, Apple is gonna have to simply convince users around the world that these new A I features that, that they’re that useful, that important, that powerful um that they really do the user experience that much.
He said, listen, it’s gonna take a, a convincing concerted and smart marketing campaign here.
You agree with that, Bob, I do, you know, and, and Ben and I have actually talked about this quite a bit.
I mean, here’s the deal as of today, it’s Apple semi intelligence because we’re not quite totally there yet.
Right?
Um They introduced a number of capabilities, text writing, um a couple of other fun little things.
Uh J of course, you have to sign up for all these things before they show up.
But, you know, I mean, look, Apple is facing some of the same issues that the entire industry is facing, which is convincing consumers that this A I stuff matters.
I think the story on the business side is a lot more clear that gen A I can actually help people be more productive.
Uh get more things done for consumers, which is of course, where Apple is primarily playing here, it’s a, it’s a bit tougher.
I mean, there’s some image editing things, but of course, Google’s done some of that before.
Um and text creation, all the replies we’ve seen that this is a slightly more advanced version.
So I, I think Ben’s right and I think you’re right that Apple is gonna have to really convince consumers that there is value in this capability and it’s gonna take a long time.
Let’s be honest, it’s not something that’s gonna happen overnight.
Um And we saw that already in the enterprise world, it’s taking a few months to, to play itself out.
Actually, a few years, it’s gonna be same is gonna be true here for the consumer side.
So I don’t expect a big impact right away, but longer term, it’s just gonna embed itself into how you use your device.
And eventually, you know, it’ll be a completely different experience.
It’ll, I think it’ll kind of sneak up on us, but right out of the gate, we’re only halfway there.
Do you think though, Bob?
I mean, and again, this is to your point, it’s not near to intermediate question, but I am curious whether long term do you think of that Apple as maybe the most of any of the mag seven names?
If they stick, the landing has the most potential to be where the most people actually experience the kind of gen A I benefits.
We talk so much about, well, you know, it’s a good question, Josh, I mean, I do think actually for the next several years, there’s more opportunity uh from a business perspective in enterprise uh by business, I mean, actually in in the amount of revenue that could be created.
So I think it’s going to take longer for consumer consumers to generate the revenues for these additional services.
Now, look, Apple has made an unbelievable business of their services.
Eventually, I imagine we will see a four fee version of Apple Intelligence that they charge charge extra for and that’s where they’re going to generate these additional revenues.
And at that point, which is several years out, I think then yes, I think Apple will really benefit But in the meantime, I think it’s gonna be the enterprise focused companies that are gonna see the biggest benefit from.
Gen A I and Apple will be sort of, you know, a little bit slower in that regard.
