Apple sought to catch up with AI rivals with “Apple Intelligence,” but that didn’t seem to help iPhone sales overall.
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The year 2024 was amazing for Apple in some ways. It won 72 Emmy nominations for its shows, for example, reflecting the continued rise of its strong services business. Its Vision Pro went on sale, but the tech giant decided to end its electric car project.
It sought to catch up with AI rivals with “Apple Intelligence,” but that didn’t seem to help iPhone sales overall. The iPhone 16 models went on sale, fitted with a new physical button. And Apple saw continued regulatory scrutiny. Here are five takeaways, looking back:
Apple first showcased its Vision Pro headset at its WWDC event in June 2023. The “spatial computer” as Apple described it, went on sale in US stores in February this year. Over time, this headset has received mixed response from buyers as well as industry experts.
Some users complained of headaches and dizziness – something that happens with other headsets too – and the headset itself, with a power cable stretching out to an external battery pack, felt less complete and self-contained than most of Apple’s previous products.
As early as April, well-known Apple analyst Ming-Chi Kuo wrote that the company was cutting back production of the headset due to lower-than-expected demand ahead. By October, Apple had “sharply scaled back its Vision Pro production,” Reuters reported.
The year also saw Apple launch its most compact Mac mini desktop computer, with its powerful M4 processors. Mac mini is Apple’s first carbon neutral Mac with an over 80 percent reduction in greenhouse gas emissions across its materials, manufacturing, transportation, and customer use, Apple said in the launch press release.
And, via a software update, Apple offered a hearing test and a hearing aid feature on its AirPods Pro 2 wireless earphones. In markets where these are available, users can test their hearing and turn on the feature as needed.
The end of the Apple car project
Early into 2024, came the news that Apple had cancelled its long-running electric car project, Project Titan, which had been in development for nearly a decade. Bloomberg led the news reports on this, which was also reported by The New York Times and other major news outlets.
The decision, announced internally in February, was a major shift for the company, which had invested billions in the effort. Apple executives informed employees of upcoming layoffs and the reassignment of many staff to focus on generative AI projects.
The car initiative, which began in 2014, faced multiple setbacks, including leadership changes and delays. Apple had scaled back ambitions, moving from a fully autonomous vehicle to a semi-autonomous one. The cancellation of the project is said to have affected as many as 2,000 people, according to Bloomberg. Apple is said to have moved this staff to its AI group.
Apple partners OpenAI to bring ChatGPT to its devices
Apple joined the race to provide more upfront AI features on its devices, including the iPhone, iPad and Macbook laptops. Via a partnership with OpenAI, Apple said in May it was is integrating ChatGPT access within iOS 18, iPadOS 18, and macOS Sequoia.
Users could use then tap its features such as its image and document-understanding capabilities without needing to jump between tools. Apple’s voice assistant Siri could use ChatGPT as well, and users are asked before any questions, documents are photos are sent to OpenAI’s chatbot. Siri would then presents the answer directly.
Apple released several new AI features of its own across its popular tools, such as Notes and Photos, for example. The company branded the overall AI suite as Apple Intelligence. The first set of these new AI features became available with the roll out of iOS 18.1 software as well as iPadOS 18.1, and macOS Sequoia 15.1, in October.
Also read: How 2024 is shaping up for Apple: What you should know
Apple faces antitrust scrutiny, first fine under EU’s DMA
The year 2024 showed there would be no let-up in the increasing regulatory scrutiny of big tech companies, Apple included, in both the US and the European Union, the world’s two biggest tech markets.
Apple is set to face the first-ever fine under the EU’s Digital Markets Act (DMA), which was enacted to curb Big Tech’s dominance, Bloomberg reported in November. The fine followed allegations that Apple breached DMA provisions, including restrictions on app developers directing users to cheaper offers outside the iPhone maker’s App Store.
This added to Apple’s ongoing antitrust troubles, following a €1.84 billion ($2 billion) fine in March over similar abuses under the bloc’s traditional competition rules involving music streaming service Spotify. Apple was also forced to pay €13 billion in back taxes to Ireland after losing a long-running court battle with the EU in September, Reuters noted, which also reported news of the DMA fine.
DMA violations could result in fines of up to 10 percent of a company’s global revenue and 20 percent for repeated infringements.
Meanwhile, the US Department of Justice (DoJ) has filed a case against Apple for violating antitrust laws around how Apple exploits its closed iPhone ecosystem to build a monopoly, The Verge reported in November.
The DOJ alleges that Apple maintains its monopoly through a combination of measures that prevent the full functionality of various apps, products and services – like limiting how well third-party smartwatches work on its platform, for example – according to The Verge.
Sales decline in China, Android rivals lead global smartphone pickup
Apple CEO Tim Cook has visited China at least three times this year, underscoring the importance of the country to the iPhone maker, both as a market and as its main supply chain partner. On the supply chain front, Apple is working to step up assembly of its iPhones in India as much as possible to reduce its dependence on China.
Apple reported its fiscal fourth-quarter results on October 31, revealing a decline in sales in China, signaling potential market saturation amid rising competition from local brands such as Huawei and Xiaomi, as The Register noted.
In the 12 months ended September 28 (Apple follows an October – September financial calendar), Greater China sales fell 7.7 percent from $72.5 billion in FY23 to $66.9 billion in FY24.
For Q4, sales in the region, Apple’s third-biggest market, was about $15 billion, falling only marginally by about $51 million. CEO Tim Cook, speaking to analysts in the earnings call after those results, noted an all-time high in Apple’s active device base, with the company holding the top two smartphone sales in “urban China.”
Even though this year saw a solid revival of smartphone sales, Apple barely participated in the growth, according to market researcher IDC. Worldwide smartphone shipments are forecast to grow 6.2 percent year-over-year in 2024 to 1.24 billion units, IDC said on November 26, in a press release. This follows two years of steep declines and the growth is fuelled by pent-up demand for device upgrades, IDC notes in the release.
Almost all of that growth, however, is attributed to Android phone makers.
Rapid Android growth of 7.6 percent year-over-year focussed in APeJC (Asia Pacific excluding Japan and China), Latin America, Middle East and Africa, and China, primarily in low-end devices, is pivotal to the 6.2 percent growth this year. In contrast, iOS is expected to grow only 0.4 percent in 2024, according to IDC. IDC expects iOS will do better next year.
Meanwhile, the iPhone maker saw another record quarter in India, in its Q4. Cook also said Apple plans to open four more stores in India.