Apple Slows Services Growth as AI Costs Rise
Apple forecasts slower services growth amid rising AI costs, with Siri AI expanding access but adding expenses.
In brief
Apple forecasts slower services growth amid rising AI costs, with Siri AI expanding access but adding expenses. Apple expects 8-9% services growth in December after AI costs and memory shortages impact revenue. Originally reported by Pymnts.
Apple CEO's Services Forecast
Apple expects slower services growth during holiday quarter amid rising AI costs.
“There are going to be some usage limits on features that rely on server-side models, which include Siri AI and intelligent photo editing, some other things like that”
Siri AI Expansion Plans
Siri AI launched in U.S. English beta in September and expanded to French, Japanese, Korean, Portuguese and Spanish in October.
Services Revenue Update
Services revenue increased 10% to $31.6 billion in September quarter with subscriptions exceeding 1.5 billion.
December Services Forecast
Apple forecasts 8-9% services growth for December quarter due to third-party licensing and foreign exchange pressures.
AI Cost Impact
Apple will record server inference expenses in services cost of sales and defer hardware revenue for Siri AI.
Memory Shortages
Memory shortages will constrain Mac and iPad shipments during December as Apple raises prices on devices.
The headline
Apple expects 8-9% services growth in December after AI costs and memory shortages impact revenue.
