News

Every household has that box, under the stairs or in the garage, filled with a tangle of cables and a mishmash of charging plugs. This mess of copper and plastic is the final resting place for wires and old phones that have not been used for years.

Many cables lie abandoned for so long their original use has been forgotten. Yet the wires remain, just in case someone, one day, can remember what they were used for.

Those boxes could be about to get even more cluttered. On Wednesday morning AEST, Apple will reveal its new smartphone line-up, launching the iPhone 15 and iPhone 15 Pro. The phones will, undoubtedly, be hailed by Apple as faster, smarter and more powerful than its previous generation.

But one update to the new phones was beyond Apple’s control. The US tech company will be changing its “Lightning” charging wire and port – a technology unique to its devices – to another type of cable, known as “USB-C”.

While the tweak may seem innocuous, it has been the subject of furious debate and expensive lobbying by Apple for years, as the tech giant battled mandarins in Brussels who had launched a crusade against technology “e-waste”.

Last year, Brussels confirmed new rules that will force technology companies to adopt a common charging standard, picking USB-C, from 2024.

Officials at the time said, under the new rules, consumers would no longer need a different charger every time they purchase a new device, saying they would be able to use one single charger “for a whole range of small and medium-sized portable electronic devices”.

They argued chargers generated 11,000 tonnes of e-waste annually in the bloc, costing consumers €250 million ($418 million) each year. Since then, Apple has begrudgingly accepted that diktat. All the new phones in its iPhone 15 line-up are now expected to require a USB-C charger.

But experts say the move could irk some consumers by yet again making former charging hardware redundant, just as Apple’s revenues are falling.

Paolo Pescatore, an analyst at PP Foresight, says he expects to see “some backlash”, while Ben Wood, chief analyst at CCS Insight says: “The expected shift to USB-C could generate some friction for Apple customers who already have proprietary ‘Lightning’ cables and docks around their homes.”

While Apple’s iPhone 15 will feature a few new innovations, such as a zoomable periscope camera, the launch comes at a delicate time for Apple.

The $US2.7 trillion technology company has endured its longest period of revenue decline since 2016 and recently reported iPhone sales had fallen by just over 2 per cent in the three months to June.

Last week, more than $US200 billion was knocked from its market value, following reports China is banning the use of iPhones by government officials. China is a major driver of sales for Apple, while it is also crucial for its manufacturing.

Aside from the switch to new charging, Apple’s iPhone 15 range is likely to be a modest upgrade compared to previous years.

Although Apple will be keen to portray the switch as just one of its new iPhone innovations, last year it was fuming at the EU decision. “Obviously we’ll have to comply, we have no choice,” Greg Joswiak, Apple’s head of marketing, told Sky News last year. “The Europeans are the ones dictating the timing,” he said at the time.

In fact, Apple has spent years lobbying against the EU’s efforts.

Brussels first called for phone and laptop chargers to meet a common standard back in 2009. Back then, there were dozens of competing charging ports that were useless on rival brands. Apple signed up to an industry group that promises to work towards a single charging standard.

However, in 2012, it introduced its unique Lightning cable, which it is still using years later. Now, there are only three main charger types in Europe.

An 88-page report in 2019, commissioned by Apple itself, claimed consumers would face costs of €1.5 billion if they were forced to change chargers as a result of the reforms.

The report claimed: “The common charger would yield, at most, only limited environmental benefits.”

As of this year, there are roughly 1.5 billion iPhones in use worldwide, all of which use the company’s Lightning cables.

Apple is expected to make the swap from Lightning globally, not just in Europe.

Buyers who have relied on the same Lightning connector for many years may also find they have to buy a new wall power adapter.

To save on packaging, iPhones no longer come with a charging cable in the box. Its AirPod wireless headphones will also switch to the new cables.

The new cable to be included with the iPhone 15 is expected to include a USB-C port at both ends, which experts said could also add to any backlash from consumers. Most consumers are unlikely to own a wall adapter with such a port, as the vast majority of wall plugs take a larger USB-A connector.

Similar changes in the past have prompted outcry. When Apple removed the 3.5mm headphone jack from its phones, initial reviewers were divided, for example.

Still, plenty of fans are enthusiastic. The USB-C cables used by many Android rivals offer quicker data transfer speeds. They are also capable of faster charging, supporting up to 240W of power. Apple’s current Lightning cable is built for just 20W.

Apple has already started using USB-C on some of its larger devices, such as its MacBook range and iPads. Its phones also support wireless charging.

Dan Ives, an analyst at Wedbush Securities, says: “Apple had to bite the bullet on the USB-C, but it ultimately gives Apple some flexibility for more design changes down the road. Not ideal, but consumers will get used to it quickly.”

Wood, of CCS, adds: “In the long term, it’s likely to benefit them, with a universal charging system having some obvious upsides.”

While European officials may have finally forced Apple to bend the knee on USB-C, there could still be a further twist.

Earlier this year, reports emerged Apple may include tiny chips in its own-brand USB-C chargers that confirm they are authentic and grant them faster download speeds.

The Commission has already hit back. According to German newspaper Die Zeit, Thierry Breton, Europe’s business tsar, wrote to Apple warning: “Devices that do not meet the uniform charger requirements will not be allowed.”

It means the charging wars may have one final shock to come.

The board of Melbourne-born global marketplace Redbubble Limited is facing a reshuffle following its AGM later next month as it navigates a year of court battles and workforce reductions.

Non-executive director Jennifer (Jenny) Macdonald will resign from the Redbubble board of directors following the group’s AGM on October 24, 2023. Another long-standing director is also expected to step down during FY24, as part of a board renewal process.

Macdonald has been on the board of Redbubble Limited since February 2018 and became chair of its audit, risk and compliance committee in October 2019.

“It has been a pleasure to serve on the Redbubble Limited board for the past five years,” McDonald said. “After reviewing my workload in light of new commitments, I have made the difficult decision to step down.

“I remain confident in the long-term potential of the group and will continue to offer my support from the sidelines.”

The board will conduct a formal search process to identify a suitable candidate to replace Macdonald. 

Chair of Redbubble Limited Anne Ward thanked McDonald for her service on behalf of the board.

“Over the past five years, the group, and its operating environment, have evolved significantly and Jenny has played an important role in helping us navigate this challenging period,” Ward said.

“The Board has started a formal process to identify suitable candidates to replace Jenny, and to accommodate further changes to the board, through an orderly process of renewal, without disrupting the recent progress that has been made to return the group to profitability."

The news comes after a bumpy year for Redbubble. In July, two long-running court battles for its US-based subsidiary, Redbubble Inc, came to a head. Redbubble Inc received two “favourable decisions” regarding copyright infringement in ongoing litigation tabled by US fashion retailer Brandy Melville and gaming company Atari Interactive.

In the Atari Interactive case, the gaming company sued Redbubble for contributory and direct trademark infringement, according to court documents released in July. On appeal, Atari challenged the district court’s summary judgment rulings and certain trial rulings.

The United States Court of Appeals for the Ninth Circuit, which oversaw the case, upheld the district court’s judgment in Redbubble’s favour.

In the Brandy Melville case, the Ninth Circuit agreed that Redbubble cannot be held contributorily liable when third parties misuse Redbubble’s service to infringe without the company's knowledge, and remanded the case to the district court to decide any remaining issues under that legal standard.

Meanwhile, the Redbubble group reduced its workforce by 23% in May 2023 in a bid to further cut costs. 

The online marketplace noted in May that it is aiming to reduce its operating expenditure by a further $13 million to $15 million on an annualised basis. The majority of the cost savings will be achieved by reducing the group's workforce by 75 roles.

Redbubble Group CEO Martin Hosking said the business has been restructured as part of the process.

"Since being appointed CEO, my primary focus has been returning the group to profitability as soon as possible. It has become clear that to achieve this, we need to further reduce our cost base. As a result, we have made the difficult decision to remove a number of roles from the group.

“As part of this process, we have restructured our business to more clearly define the group function and two operating companies, Redbubble and TeePublic."

Amid these shifts, Redbubble recorded a gross profit after paid acquisition (GPAPA) margin of 28.5% in the fourth quarter of FY23, up 550 basis points above prior corresponding period (PCP).

This is also 350 basis points above the historical average, according to the company.

Despite the improved performance in the fourth quarter, the FY23 GPAPA margin was down 120 basis points on the PCP to 20.9%, due to softer performance in the first half.

Looking ahead, the group claimed trading conditions will remain soft in its key markets, particularly the US, in the near term. Redbubble also operates in Europe and Australia.

Due to this, the company noted it will focus on cost of goods sold (COGS), promotions and paid marketing activities to maximise GPAPA.

The group expects its FY24 GPAPA margin to be between 23% and 26%.

The group also expects to see the full benefit of cost-saving measures implemented in FY23 in FY24, with operating expenditure predicted to be between $92 million and $100 million in FY24.

“As we look ahead, we remain cautious and expect market conditions to remain challenging,” Hosking said. “As a result, we are focused on what we can control - ensuring we are operating as efficiently as possible and maintaining strong cost discipline.

“We continue to believe in the potential of our two marketplaces, Redbubble and TeePublic, and are confident that both businesses can deliver sustainable growth.”

The three mid-ranking Silicon Valley engineers behind Nvidia had just $US40,000 ($62,350) between them when they started the company three decades ago, fuelled by a belief that 3D graphics would change the video game industry.

Now, it costs the same amount to buy just one of Nvidia’s microprocessors, and it can’t make enough of them.

The artificial intelligence (AI) boom has made Nvidia perhaps the world’s most important tech company and secured it a value of more than $US1.2 trillion.

Its latest boost came on Wednesday night, when the business revealed quarterly profits had climbed by a staggering 843 per cent in a year alone, up from $US656 million to $US6.2 billion.

Sales in its data centre business, which reflects demand for its top AI chips, climbed by 141 per cent in just three months, surpassing even Wall Street’s lofty expectations.

The best news for investors was that the company predicted the party would continue, forecasting another leap in sales in the third quarter of this year.

Shares, already at a record high, rose by 6.5 per cent as markets opened on Thursday and to some, the only question is how high can it can go.

The latest rally cemented Nvidia’s spot as a world-leading tech giant.

Big dreams

Jensen Huang, Nvidia’s chief executive and principal founder, always had big ambitions.

The company decided to focus on video games in the 1990s when Huang observed demand for increasingly advanced computer graphics and predicted a need for drastically more powerful chips as games moved towards more immersive and 3D worlds.

When Nvidia’s share price hit $US100, Huang had the company’s logo tattooed on his arm.

But even he would have failed to see the AI rush that boosted his personal fortune to $US42 billion.

Nvidia’s work on computer graphics in the 1990s led it to invent the graphics processing unit (GPU), a type of microchip dedicated to computer gaming and video tasks. GPUs, however, also excel at other types of number crunching.

Nvidia thrived during the cryptocurrency booms of 2017 and 2021, as its processors proved to be highly proficient at the high-powered mathematics needed to mint new Bitcoins.

It also rode a brief flurry of excitement around the “metaverse”, the virtual reality championed by Mark Zuckerberg.

However, the AI boom has eclipsed all that.

Large language models such as ChatGPT and Google Bard require thousands of GPUs, both for their initial “training” and for the subsequent interactions known as inferences.

Almost every company and government is falling over themselves to invest in AI.

Amazon, Microsoft and Google, which operate the giant cloud computing data centres on which AI models generally run, are placing orders worth billions of dollars with Nvidia.

To a degree, Huang is fortunate his video game chips are so well suited to AI, but his allies reject suggestions he simply stumbled upon a pot of gold.

“He was one of the early people to think about it (AI) and study it,” says a former Nvidia executive.

“Jensen had big ears, he was listening to what was happening, he was experimenting and investing in how they could tweak these GPUs to be better at this stuff.

“He took a decision to bet significantly on AI in around 2018.”

Today, the company has competition from chip making giants AMD and Intel but enjoys a huge head start. So much so that Nvidia is now practically synonymous with AI itself.

The company’s results on Wednesday were seen as definitive because they suggested its leap in sales was not just a one-off but part of a sustained surge in investment.

Huang said that there was now a “tipping point” at which companies were diverting more of their investment into AI technology. “A new computing era has begun,” he said. “Our demand is tremendous”.

Still, not everyone is buying what Huang is selling. There are concerns that the public’s interest in ChatGPT is beginning to wane. Analysis of web traffic data shows visitors to OpenAI’s ChatGPT site fell by 10 per cent in June.

While the ChatGPT boom has relied on companies buying up swathes of Nvidia chips, companies such as Meta are now championing AI algorithms that need less computing power.

Meanwhile, some investors have decided that Nvidia’s skyrocketing share price makes it unpalatable.

One investment house, AXS Investments, has even launched a fund dedicated to taking short positions against Nvidia - betting its stock will fall. Investors have so far put $US100m into the fund.

High demand for the company’s processors in China could also come unstuck due to US sanctions. The White House has already blocked the sale of some of its most powerful AI chips to Beijing and could go further.

Greg Bassuk, chief executive of AXS Investments, says Nvidia’s valuation is “suspect for some investors concerned about geopolitical impacts on the company’s growth prospects”.

He adds investors are now looking at whether the company’s “runaway growth in AI can persist at this pace”.

However, so far this year short-sellers are nursing heavy losses by betting Nvidia’s share price will fall and are down over $US11 billion, according to analysts S3 Partners.

“Nvidia’s hardware has become indispensable to the AI-driven economy,” said Jacob Bourne, an analyst at Insider Intelligence. “Its results show how crucial the tech giant has been to the current economic growth narrative resting on the outlook that AI will elevate productivity and unlock trillions in economic value.”

If Nvidia can secure a fraction of those trillions, it might be unstoppable.

Pureplay retailer Booktopia says a challenging economic climate coupled with the impacts of its transition to its new customer fulfilment centre (CFC) resulted in a loss of $29 million in FY23.

Sales for the year to June 30, fell 18 per cent to $197.6 million while underlying EBITDA declined 173 per cent to $4.6 million.

The average order value grew 4.9 per cent to $79.29 while the average units shipped fell 19.6 per cent to 6.83 million.

Earlier this year, the company implemented a number of cost rationalisation and margin optimisation measures to help manage economic headwinds in its cost base.

Meanwhile, the group’s new CFC – which is operational now – is expected to improve efficiencies, reduce operational costs and support growth.

Booktopia CEO David Nenke said in the next financial year, the business will focus on excelling in key areas that enable the group to stand out in the market.

“Our recent equity raise of $10.9 million, has provided further working capital, helping to increase available inventory for the important Christmas period as well as contribute to the successful transition to our new CFC.

“We are looking forward to launching a series of additional strategic initiatives in the coming months, which will expand the unique selection we offer to readers across ANZ, and improve personalisation and the user experience.”

Ruslan Kogan says investors should start valuing Kogan.com like a software stock and not as the eponymous online retailer known for its cheap gadgets and tech accessories.

The company booked full-year earnings in line with its latest guidance, with gross sales down 28.4 per cent to $844.8 million and revenue off 31.9 per cent to $489.5 million.

That translated to a 26 per cent drop in gross profit to $136.6 million, and a loss of $25.4 million for the 2023 financial year, narrowing slightly from a $36.2 million loss previously.

The business has worked to run down its inventory, which it accrued after over-buying at the tail-end of COVID-19 lockdowns, and said this had reduced to $68.2 million at June 30, or more than 57 per cent.

However, investors have bought back in to the stock and Mr Kogan believed this was down to advances in its “platform-based” businesses.

He told The Australian Financial Review platform sales exceeded sales derived from its retail inventory for the first time, and that he expected this to grow and reduce its reliance on retail performance. For revenue earned on its online marketplace, Kogan.com gets a commission from other retailers and those paying to advertise their wares.

It also includes Kogan Mobile, Kogan First subscriptions (its version of Amazon Prime), Kogan Internet and Kogan Energy.

Tech-style earnings

Because investors generally valued software stocks with recurring subscription-based revenue more generously than retail stocks, Mr Kogan declared “we are now actually a tech business”.

“If you rewind 17 years to when our business started, 100 per cent of our business was inventory-based sales, and it stayed like that for the first 10 years, before we started to launch more and more of our business to be non-inventory based,” he said.

“In the last six months, the software platform parts of our business have become the majority.”

More than 57 per cent of gross sales and 71 per cent of gross profit was generated from platform-based sales.

“While Apple’s top line continues to grow at a moderate pace, its share price has been going ballistic because everyone’s valuing them like a software business,” Mr Kogan said.

“Even if nobody changes their Apple Mac or their iPhone, their apps and Apple TV subscriptions are going to keep renewing ... And investors see this software revenue as the best for business because it is the least risky and highest margin.”

‘Premature’ change to valuations

The head of small cap research at RBC Capital Markets, Wei-Weng Chen, argued it was premature to value Kogan as anything other than a retail stock, but acknowledged impressive growth in some of its non-traditional businesses such as Kogan First.

“To Kogan’s credit, they have overseen steady loyalty program growth since launching, despite pushing though some pretty large price increases for membership, and active customers declining by approximately 30 per cent since December 2021,” Mr Chen said.

“One way around paying more for digital ads ... is for online businesses to lean more on loyal, repeat customers, which is why growing Kogan First membership is a key focus for management.”

Mr Chen said there were positive signs in Kogan’s results in both its inventory management and unaudited numbers from the first month of the 2024 financial year, which showed $3.5 million of adjusted EBITDA, which compared favourably to $1.5 million last year.

Mr Kogan said the low-cost nature of products sold on Kogan.com meant it would fare better than other retailers during a cost-of-living crisis.

“We’ve done relatively well, and that is driven in part by the fact that we’re not selling Louis Vuitton handbags and BMWs and Rolls Royces, we’re selling value-based products,” he said.

“When the economy is flying, people that want a new TV will just look up the latest Samsung and bang, click, buy, done, but at the minute we are seeing more specification-based buying, where someone works out they want a 55-inch TV that connects to the internet to watch Netflix, and they come to us for a deal.”

Investors have been less convinced, with Kogan shares down 11 per cent at $5.07 on Monday.

Amazon has confirmed plans to build Australia’s largest warehouse, one which will put a fleet of robots to work in the Melbourne suburb of Craigieburn.

The automated fulfilment centre, which at 209,000 square metres will be the size of 11 MCGs, will be 830 square metres larger than Amazon’s robotic fulfilment centre in Kemps Creek, Western Sydney, which was its first such Australian centre. The new site is scheduled to open in 2025.

As with the Kemps Creek site, the Craigieburn facility will have robots working alongside humans. The robots will collect stock from around the warehouse and bring it to employees so they can prepare packages for shipment.

“Instead of the associate going to the items, the items are coming to the associate. That helps speed [up] order processing time,” Amazon Australia country manager Janet Menzies said.

The investment in the robotics site is another sign that the e-commerce giant, which has poured $8.4 billion into its Australian operations since its launch here, is taking a long-term view of the local retail market.

Amazon has been upbeat about its growth opportunities in Australia, despite a deluge of data that suggests household spending is contracting in the face of surging living costs.

Analysts from investment and advisory group Jarden predicted this year that the total value of merchandise sold on Amazon in Australia would hit $5 billion in 2024.

Menzies said last month that the company has experienced a jump in subscription orders for everyday grocery items. It was also upbeat about its July Prime Day sales event.

Amazon shares are up by about 12 per cent over the past month. The stock surged after the retailer surprised the market with stronger than expected quarterly earnings. The US-based company posted sales growth of 11 per cent year on year despite a global spending slowdown.

Menzies said the investment in the new Melbourne site would be a win for the retailer’s third-party sellers, who would be able to store products there.

Amazon will recruit for new types of warehouse jobs at the Craigieburn facility, including IT and engineering roles to maintain the robots. The site will employ 2000 staff once fully operational.

Increasing investment in automated warehouses across Australia’s retail sector has driven the need for a range of new logistics jobs over the past few years.

Supermarket giant Coles is also looking for a new generation of tech-savvy warehouse workers to help staff its automated grocery facility in Queensland. 

Fears soaring fuel costs would wound demand for petrol-hungry SUVs have failed to materialise, the boss of auto classified website Carsales.com said as the company reported a quadrupling of full-year profit.

Carsales chief executive Cameron McIntyre said the company has maintained momentum in the first six weeks of this financial year, defying a crunch in household budgets from the RBA’s most aggressive series of interest rates in 30 years.

He said search traffic and sales remain at levels similar to 12 months ago, despite JB Hi-Fi calling out “heightened uncertainty” and Myer and Nick Scali reporting discretionary spending beginning to slow.

“In Australia we do 20 million-plus (search) sessions a month. Across the world we would do 100 million sessions a month. What’s interesting is the searches versus last year are pretty similar in terms of what people are looking at,” Mr McIntyre said.

“I was expecting to see as things got tougher that people would search for more hatches and less SUVs on two bases, hatches tend to be cheaper and also you’ve got high cost of living around fuel so a hatch would be a cheaper car to run.

“But what we have seen in the last 12 months is there has been a move towards SUVs, searching less for sedans while hatches have been around the same, which was a surprise.”

More surprising is the pandemic-fuelled surge in used car prices has failed to dissipate, despite more vehicles hitting the market. Mr McIntryre said prices remain 40 per cent higher on 2019 levels, heralding a new normal.

“Over the last sort of several months we’ve seen prices come down marginally, but they’ve stabilised. They’re still around that 40 per cent mark above where they were pre-Covid. I honestly don’t see them tracking down materially anytime soon.

“What it says to me is where interest rates have gone up over the last sort of 12 to 18 months … on a $30,000 car loan doesn’t really move the needle. The other thing is from additional research that we’re doing is consumers have pretty much banked where car prices are today.”

Carsales, which took over US-based Trader Interactive and a controlling stake in Brazil’s Webmotors during the year, reported a 301 per cent leap in net profit to $645.6m. Meanwhile, revenue surged 53 per cent to $781.2m.

As a result, the company has hiked its final dividend, which it will pay on October 16, by 33 per cent to 32.5 cents a share. Carsales’ shares soared 7 per cent to $26.33, valuing the company at almost $10bn, on Monday.

Part of Carsales financial success lies in its acquisition spree across the Americas. Its North American operations reported a 22 per cent surge in revenue to $239.4m, while earnings before interest, tax, depreciation and amortisation vaulted 17 per cent to $140m.

In Latin America, revenue leapt 40 per cent to $138.9m, while EBITDA surged 50 per cent to $47.7m.

More than half of Carsales’ earnings are now generated outside Australia, and Mr McIntyre is expecting “good growth” in the year ahead, highlighting economic trends in the US that are about six months ahead of Australia.

“The consumer in the US has come up a little bit. What happened during Covid was everyone moved into these lifestyle and leisure assets because they couldn’t travel anywhere. That’s come off a bit but comparing that to 2019, which is pre-Covid, things have continued to grow in that business.

“As (US) market conditions improve and interest rates come down, I think what you’ll see is people should eventually start venturing back into those lifestyle assets that they might have been holding off on while interest rates were reasonably high. So that bodes well for us if we’re six months behind them in that cycle.”

Barrenjoey head of media and telco research Eric Choi said Carsales’ actual earnings before interest, tax, depreciation and amortisation of $425m were in-line with consensus estimates of $428m.

“FY24 guidance: for ‘good’ EBITDA growth on a PF (pro-forma) FY23 EBITDA base of about $496m, we think good can mean 10-14 per cent, which would imply FY24 EBITDA of ~$546-565m,” Mr Choi wrote in a note to investors.

“However guidance excludes potential FX (foreign exchange) tailwinds, which could be another slight kicker in FY24.”

E&P analyst Entcho Raykovski said the FY24 outlook for “good” growth in pro-forma EBITDA is “broadly consistent with consensus estimates of an 11 per cent gain.

“In our view, this result and outlook commentary will be enough for the stock to hold on to its recent gains.”

Citi’s Siraj Ahmed said: “We see minor upside risks to consensus on FY24e EBITDA to reflect guidance, however there could be minor downside risks to NPAT given consensus is forecasting ~20 per cent yoy growth vs. company guidance of 15 per cent growth”.

Apple is likely to report a dip in iPhone sales in the April-June quarter as shoppers held out for a new model in a slow economy, making it important for the company to detail how it is using artificial intelligence to augment growth, analysts said.

The world’s most valuable firm will wrap up Big Tech earnings on Thursday, with a likely 1.6 per cent drop in total quarterly revenue, according to Refinitiv – its steepest drop in third-quarter revenue since 2016.

IPhone sales likely fell more than 2 per cent in the period, according to 24 analysts polled by Visible Alpha, compared with a near 3 per cent increase a year earlier and a 1.5 per cent rise in the quarter ended March.

The quarterly report could mark a break from an upbeat earnings season for the likes of Meta Platforms, Alphabet and Microsoft that have shown resilience in their cloud businesses and an uptick in digital ad sales.

“Apple is not immune to general macroeconomic trends and will continue to set the pace (for the smartphone industry) for quite some time,” said Bob O’Donnell, founder of TECHnalysis Research.

With details about the new iPhone 15 expected next month – which could sport the more universally accepted USB-C port on some models – iPhone sales could get a small nudge in the July-September quarter, said analysts, who predicted a mixed bag of results for the period.

Apple traditionally does not provide quarterly outlook, but analysts expect the company may elaborate how it is using AI to improve its upcoming products.

The company has so far avoided buzzwords like AI at its events, in a contrast with tech giants including Alphabet and Microsoft. Last month, Bloomberg News reported Apple has quietly built its own framework to create large language models known as “Ajax”.

“We expect Apple’s updated comments on its AI aspirations to be a focus,” analysts at Well Fargo wrote in a research note, adding that any commentary around the technology could boost the stock.

Apple’s shares have gained more than 50 per cent so far this year, compared with a nearly 37 per cent increase in the tech-heavy Nasdaq Composite.

Iphone slowdown

Much of the weakness in iPhone sales is expected to come from the Americas, where revenue is set to fall 6 per cent, analysts said. Sales from China – Apple’s third-largest market – are expected to be flat due to an uneven economic recovery, though the company has fared better than Android rivals in the country.

Overall smartphone shipments to China declined 2.1 per cent in the second quarter, according to market research firm International Data Corp.

“Most investors feel a soft China could pose a risk to the numbers and further commentary, but Apple’s position in China is on a solid footing and the company is likely to see only a small, if any, decline in iPhone sales,” Piper Sandler analysts said.

“If there is any sales weakness from China, it is likely to be easily offset by strong sales momentum in India,” they added.

Mac and iPad sales are expected to fall by 10.6 per cent and 11.2 per cent, respectively, according to Refinitiv data.

But the services business – home to Apple’s App Store and audio and video streaming services – could be a bright spot thanks to an uptick in the ad market, some analysts said.

The business, which accounts for roughly a quarter of Apple’s total revenue, is expected to grow 5.7 per cent as it also benefits from price increases for iCloud subscriptions, though the pace is broadly similar to that in the preceding three quarters.

Shares in Australian software giant Atlassian soared after it posted fourth-quarter results that beat Wall Street expectations, adding billions to the paper worth of rich list co-founders Scott Farquhar and Mike Cannon-Brookes.

Atlassian shares – listed on the Nasdaq – were up 22.9 per cent in after-hours trading to $US208.50, their highest since October last year, with the company’s bet on nascent AI and cloud computing technologies, as well as what Mr Cannon-Brookes and Mr Farquhar described as “hard yakka” paying dividends.

For the fourth quarter it posted a net loss of $US59m, or 23 cents per share, narrowed from a net loss of $US90.6m a year earlier. Revenue was up 24 per cent to $US939m compared to $US760m a year earlier.

The company said it expected first-quarter sales of between $US950m to $US970m, compared to FactSet analyst forecasts of $US954m.

“We knew we’d be putting in the hard yakka this year, and that’s exactly what we’ve done,” co-founders Mike Cannon-Brookes and Scott Farquhar said in a letter to shareholders.

“Atlassian ended FY23 with over 260,000 total customers and generated over $US3.5bn in revenue in the face of a challenging economy. And importantly, our three biggest bets are paying off, further strengthening our conviction in our strategy.”

Atlassian is now growing its headcount, after shedding around 5 per cent of their total headcount earlier this year, a move they said at the time was about rebalancing its teams rather than reacting to the tech downturn plaguing software companies and their valuations.

The executives said on Friday forays in cloud computing, enterprise and IT service management were all driving revenue growth, and that its continued investment in R&D had enabled it to take advantage of the next generation of AI technologies.

The company now has 262,337 customers, it said its letter to shareholders, slightly below consensus analyst expectations of 264,780 customers.

“We took advantage of mind-blowing developments in AI to bring generative capabilities into our products and unleash even more of our customers’ potential. And we responded to a rapidly shifting environment by rebalancing our teams so we can meet our customers’ needs faster,” the executives wrote.

“In other words, we did what we said we were going to do: play offence.

“There are massive opportunities in cloud, enterprise, and ITSM [IT service management] that will drive Atlassian’s growth for years to come. Plus, tech’s labour market is such right now that we’re able to hire amazing talent who might not otherwise be available.

“These moves set Atlassian up to win over the long term and reflect our enduring confidence in our business model, our strategy, and our team. We aren’t afraid to make tough trade-offs in support of durable growth that others shy away from, even when it may be uncomfortable in the short term.”

It announced its chief revenue officer, Cameron Deatsch, will leave the company at the end of December 2023 after nearly 11 years.

Two of Australia’s wealthiest people, Mike Cannon-Brookes and Scott Farquhar had seen more than $10bn wiped from their estimated wealth this year amid a torrid period for technology companies before Friday’s rise.

Its shares were up about 32 per cent over the year to date however, before the after-hours jump, and compared with a 17 per cent lift for the overall S&P 500 index.

Mr Cannon-Brookes and Mr Farquhar founded Atlassian in 2001 and while the company is listed on the Nasdaq exchange in the US they have chosen to keep its headquarters in Sydney. The company builds enterprise collaboration software for teams, and its products including Jira and Confluence have racked up more than 10 million active monthly users globally.

Atlassian announced its ‘Atlassian Intelligence’ AI capabilities in April, hoping to benefit from the hype and investor excitement around technologies like ChatGPT. It built the functionality in collaboration with ChatGPT maker OpenAI and is embedding AI across all of its cloud software products, including Jira, Confluence and Trello.

Workers will be able to automatically summarise decisions and action items from meeting minutes and ask questions such as “how much can I spend on my home office set up?”, Mr Cannon-Brookes said in April on the ground at the company’s Teams 23 summit in Las Vegas.

“This will enable our customers to be far more productive,” he said. “I think about it as a superpower for individuals to be able to generate things, summarise things very rapidly and it’s almost like giving individuals a multiplier, in terms of a fundamental productivity improvement across all of our software.”

Canva has added two new investors to its register following an investor secondary transaction, Street Talk understands.

Sources said San Francisco-headquartered ICONIQ Capital and Coatue Management, another technology sector investment manager based in the United States, have purchased Canva shares from existing investors, valuing the graphic design company at $US25.5 billion ($39 billion).

An email sent to staff said the company will kick off broader staff secondary transaction “in the near future”. “We’ll aim to kick off this process within the next six months,” the email, obtained by Street Talk, read.

Canva was valued at $US40 billion in its last external funding round in September 2021, but it suffered markdowns to $US25.6 billion last year as local venture capital firms followed US investors in re-assessing tech firms.

In May, The Australian Financial Review reported that individual Canva shares were worth $US1680 at its last funding round, while sources suggested they were on offer in US secondaries markets for less.

Last year, Blackbird Ventures cut its valuation of the privately owned software company by $US14.4 billion after adopting a “strengthened” valuation methodology across all its venture funds. Other investors include industry superannuation funds Hostplus and Aware Super.

Coatue, best known for backing Afterpay, is led by Philippe Laffont, while ICONIQ counts Meta chief executive Mark Zuckerberg and Twitter founder Jack Dorsey among its investors.