Apple shares fall premarket after iPhone 16 unveiling

Apple shares ( NASDAQ:AAPL ) fell in premarket U.S. trading on Tuesday after the tech giant unveiled the latest AI-enhanced versions of its flagship iPhone and the European Union’s top court ruled against the company in a multi-year legal dispute over her taxes in Ireland.

The Cupertino-based group announced a number of improvements to the iPhone 16 on Monday, including improvements to the Siri voice assistant and a number of smart camera tweaks aimed at professional video editing that are set to roll out over time. Apple is banking on the iPhone 16, which is set to go on sale on September 20 with pre-orders available from this Friday, to help revive sluggish sales of the device.

Analysts said the new iPhones and AI features largely lived up to expectations set by Apple’s previous disclosure of its plans to advance AI, dubbed “Apple Intelligence.”

Jefferies analysts argued that Apple needs to offer more aggressive trade-in prices to entice customers to upgrade to the new iPhone. Jefferies added that Apple’s AI features would only prompt a gradual acceleration in sales and that expectations for a near-term sales recovery were likely to cool.

Meanwhile, analysts at Evercore said Apple’s new revelations, particularly about artificial intelligence, were a “more polished version” of the company’s announcements during its closely watched developer conference in June. The brokerage also noted that Apple’s incremental rollout of AI could “lengthen” an iPhone replacement cycle but keep overall sales growth positive.

Analysts at Wedbush struck a much more positive tone, stating that new AI features were likely to drive strong sales growth over the “next 12 to 18 months.”

But some analysts have warned that the new features will roll out gradually, potentially deterring immediate buyers, especially amid stiff competition from rivals such as Samsung ( KS:KS:005930 ) and China’s Huawei.

At a separate event on Tuesday, Huawei unveiled a $2,800 triple phone — dubbed the Mate XT — as it seeks to strengthen its lead in China, the world’s biggest smartphone market. According to the company’s website, the Mate XT has already received over 3.6 million pre-orders. The total global market for flip phones was about 4 million units in the second quarter, Reuters reported, citing data from research firm IDC.

Apple, meanwhile, has yet to find an AI partner for China, one of its biggest markets. The company is struggling with a year-over-year decline in iPhone sales in China.

EU Court rules Apple in Irish tax case

Elsewhere on Tuesday, the European Court of Justice ruled that Apple must repay 13 billion euros in back taxes, overturning an earlier ruling that had ruled in the company’s favor.

The EU’s top court said two entities overseen by Apple — Apple Sales International (ASI) and Apple Operations Europe (AOE) — had effectively received state aid from Ireland in the form of tax advantages from 1991 to in 2014.

ASI and AOE, which were both incorporated in Ireland but were not tax residents, were allowed by Ireland to exclude from their tax base profits derived from the use of intellectual property licenses held by the entities; said the Court. Ireland had adopted this method because corporate headquarters were outside the country and management decisions were made in the US, he added.

However, in 2016, the European Commission – the EU’s executive branch – found the arrangement to be “illegal and incompatible” with the bloc’s internal market rules, saying Apple was “taken advantage of”. The Commission ordered Dublin to “recover” back taxes from Apple.

The ruling was later overturned by the EU’s General Court in 2020, which ruled that lawmakers had failed to prove that Apple had received a “selective advantage” in Ireland. The General Court also stated that the Commission’s reasoning was based on incorrect assessments of “normal taxation” under Irish law.

But the Court said it was overturning that decision, arguing that the General Court had “erred”.

And thats how Apple shares fall premarket after iPhone 16 unveiling.

Apple Shares current price – 216.87 USD

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Good Luck on investing in apple shares.

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Written by D Fernando