Featured Story
Intel and telcos left in virtual RAN limbo by rise of AI RAN
A multitude of general-purpose and specialist silicon options now confronts the world's 5G community, while Intel's future in telecom remains uncertain.
Apple's CEO attributed a strong fiscal Q1 in part due to interest in Apple's AI features, but some analysts were skeptical about how well Apple Intelligence is performing.
Apple's strong fiscal Q1 was in part due to Apple Intelligence driving up iPhone 16 sales, said CEO Tim Cook. While that's also good news for service providers selling iPhones to wireless customers, some analysts were skeptical about how well Apple Intelligence is performing.
"We did see that the markets where we had rolled out Apple Intelligence, that the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available," said Cook during Apple's earnings call with analysts. Apple Intelligence is Apple's approach to delivering AI features via the iPhone and integrates with OpenAI's ChatGPT.
For its fiscal Q1 2025, ended December 2024, Apple reached a revenue of $124.3 billion. This was an "all-time record" quarter for the company, said Cook, with Apple's Q1 earnings up 4% year-over-year (YoY).
Myriad AI opportunities for service providers
If Apple Intelligence continues to perform as well as Cook claims, that's good news for the telecom industry, and in particular, service providers, who are banking on the idea that the AI tide will lift all boats.
Analysts with Canalys, a research firm and sister company to Light Reading, forecast that generative AI (GenAI) has an expected growth of $158.6 billion by 2028 at a five-year compound annual growth rate (CAGR) of over 59% (from 2023 to 2028). Service providers delivering advanced data and analytics services that utilize or enable GenAI are among the "channel partners most primed for this opportunity," said Canalys.
Researchers added that service providers have an opportunity to resell, co-sell and upsell AI products to customers, including building managed services around AI. Verizon, for example, recently launched Verizon AI Connect to stitch together data center colocation and edge computing resources, plus Verizon's fiber and 5G network infrastructure, to support AI workloads and the shift to AI inferencing.
AT&T recently announced a structured sale-leaseback deal for some of its underutilized central office facilities, and while the company didn't mention AI in the release, AT&T officials in the past have discussed the possibility that AT&T central offices could host AI capabilities.
There are lots of reasons not to upgrade
For the fiscal Q1 2025, iPhone sales were down 0.8% YoY, reported KeyBanc Capital Markets in a note to investors. KBCM cited a decline in US consumers upgrading devices and competition from Chinese vendors among the challenges Apple is facing in the smartphone market.
While Cook said interest in Apple Intelligence is growing, there's no word yet on when it will be approved by regulators for release in China. However, in an interview with Reuters, Cook said that "about half of Apple's 11% decline in China revenues was attributable to changes in how much inventory the company's resellers held."
"Apple is currently facing heightened levels of competition in its international markets (mainly in China), and the Company has yet to resolve the iPhone 16 sales ban in Indonesia," wrote KBCM.
KBCM expressed skepticism over Apple Intelligence's allure as a driver for iPhone sales. KBCM said that "expectations around the AI smartphone seem overdone," given low device upgrade rates in the US. The analysts noted that Apple Intelligence was only available in the US in English, and there were no new network advancements. Also, analysts say more extended equipment installment payment plans from wireless service providers (24 to 36 months) and limited new iPhone functionality from Apple are among the reasons consumers aren't rushing to upgrade.
During Apple's earnings call, CEO Cook noted that in April of this year, Apple Intelligence will be available in more languages including French, German, Italian, Portuguese, Spanish, Japanese, Korean, and simplified Chinese, plus localized English to Singapore and India.
For 2024, Apple experienced a 3% YoY decline in iPhone shipments, but revenues for the smartphones were less impacted, "driven by the strengthening portfolio of its Pro series," said Counterpoint Research.
You May Also Like