Benefiting from the sales of hardware products like the iPhone, along with record-setting performances from its services business, Apple is expected to surpass US$400 billion in total revenue for the fiscal year 2024 (closes at the end of September). A major part of this growth will be from the Apple Intelligence platform, which will gradually be integrated across various hardware product categories, potentially driving device upgrades.
According to a report by research firm Counterpoint Research, Apple's services division saw its business grow faster than the hardware division in the fiscal year 2024. In the third quarter, revenue from services reached US$24.213 billion, a year-on-year growth of 14.1%. Among all of Apple's core products, this is second only to the iPad's 23.7% year-on-year growth, which was fueled by the launch of a significantly upgraded new product in May.
However, considering that revenue from services still accounts for less than 30% of Apple's total revenue, hardware products will remain the key to driving growth. In addition to the upcoming iPhone 16 series, the new iPad and Mac products are also expected to support the Apple Intelligence platform, further boosting sales.
Moreover, besides hardware, Apple Intelligence is expected to increase service revenue by at least 10% to 15% over the next few years.
IDC raises 2024 AI smartphone shipment forecast
Research firm IDC is even more optimistic about AI smartphone shipment growth, predicting that as more and more flagship products incorporate generative AI features into everyday use, AI smartphone shipments will grow by 344% in 2024, accounting for 18% of total smartphone shipments. In particular, with the help of Apple Intelligence, iPhone sales are expected to grow by 4% in 2025.
IDC's report indicates that as consumer electronics demand recovers and AI features are increasingly integrated, global smartphone shipments will grow by 5.8% in 2024, reaching 1.23 billion units, up from a previous forecast of 4% growth and 1.21 billion units.
Analyses point out that although generative AI smartphones are still new to the market, leading brands are focusing on high-end flagship models to capture market share. The US and China, two key markets, are expected to be the primary market that drives AI smartphone demand.
