Troubles mount for Apple as WWDC nears

As Apple (AAPL) prepares for its upcoming Worldwide Developers Conference (WWDC) in June, the tech giant finds itself wrapped in a series of negative headlines. Apple is currently facing an antitrust lawsuit from the Department of Justice, grappling with declining iPhone sales in China, and encountering price cuts for iPhones at authorized retailers.

In the midst of these challenges, Yahoo Finance Tech Editor Dan Howley breaks down the details and provides insight into what is expected at the highly anticipated WWDC conference.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

Editor's note: This article was written by Angel Smith

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JOSH LIPTON: Apple taking a hit so far this year as it comes to face with several potential headwinds. Let's bring in Yahoo Finance's Dan Howley with more on the troubles biting into Apple and what may be ahead for the tech giant. Dan.

DAN HOWLEY: Yeah, Josh, it felt more like a bad year than a bad quarter for Apple with all the different news that's come out. The latest is that iPhone sales in China were down 33%. That's according to Chinese government data. Bloomberg had reported on that.

Before that, counterpoint research had reported in the first six weeks of 2024, iPhone sales that have fallen 24% year-over-year. Now, overall, smartphone sales in China had fallen 7% at that point, but still it's worth noting that fall in China itself. Part of that has to do with the economic conditions there. Part of it has to do with the rise of a resurgent Huawei, as well as a huge boost in iPhone sales that had happened in 2023 is a holdover from 2022 when there were some factory issues. But still, it's important to point that out, as well as the fact that Apple authorized retailers are cutting prices on some iPhones, the iPhone 15, the latest iPhone. And that's according to the South China Morning Post.

But it's not just the iPhone. There's also the obvious 800 pounds gorilla in the room, the battle with the DOJ, that huge antitrust trial, or antitrust lawsuit, rather, that the DOJ filed. Apple is going to have to fight that.

One of the key issues that is worth noting is that the bigger problem may not be to specific business sectors, but to Apple's attention. And so, you know, Bill Gates has famously said that if they didn't have the antitrust suit going on at Microsoft in the '90s and early 2000, they might not have missed the boat on mobile.

Remains to be seen hindsight's 2020, what have you. They did try to launch their own Windows phone. Nobody's using one now. So that tells you how well that went. But it is something that I think is worth pointing out about the attention.

JARED BLIKRE: Yeah, and then that gives us the opportunity to talk about some of the products and upgrades that we might see at the worldwide developer conference which is in June. I believe June 10th. What can we expect this year? Anything big?

DAN HOWLEY: So the big thing is going to be-- it's got to be AI. We had seen that some inkling and hints of it in some of the discussion on AI. There's the a tweet by Jos, who had said that it will be absolutely incredible WWDC. So capital A, capital I.

Obviously, wouldn't do that when you look at the rest of the case that he's used there. So that's a clear call out that AI is going to be the big thing.

Now, there's two reasons for that. One is maybe they're going to have a whole bunch of cool new AI stuff at WWDC. The other is to notify Wall Street that, look, we know what's going on. We know that you guys are talking about this. So we're thinking about it. And there's going to be something.

JOSH LIPTON: What would surprise you, Dan, when it comes to-- would it be like is it going to be like a bigger better Siri? I mean, what would surprise Dan Howley, as you're watching it?

DAN HOWLEY: I mean, if Siri could do better, in general, that would be great. But I think opening up generative AI on the iPhone could mean a lot more exploring without having to open up apps. I think that would be something interesting if they get the voice aspect of that going.

Now, OK, that could also lead to more conversation about antitrust and Apple blocking out competition.

JOSH LIPTON: Yeah. For sure.

DAN HOWLEY: But still, I think the phones now are displays, cameras, batteries. That's what people want to know about. We've seen some camera apps that have gotten generative AI with Google and Samsung. If Apple's going to just tread that same road, it's not going to be all that interesting, unless they manage to do something more than like I take a picture of myself and make it look like I can dunk a basketball. That's what you can do with GenAI on Google's phones and Samsung's. Apple's got to do a little bit more to really get people jazzed up about.

JARED BLIKRE: Cinematic virtual dunking of a basketball.

DAN HOWLEY: Also, just make me be able to dunk a basketball. Maybe that. Makes me taller. I mean, you know.

JOSH LIPTON: All right. We'll put that on Tim Cook's agenda. We'll see. What happens, Dan?

DAN HOWLEY: Anything's possible. Yeah.

JOSH LIPTON: Who knows? Thank you, Dan.