• Apple updated its "risk factors" section in its latest 10-K filing.

• The tech giant warned about future product profitability and risks related to "geopolitical tensions" and AI features.

• It's common for companies to update their risk factors with possible business challenges.

Apple's latest annual report offers insight into what the tech giant views as potential risks to its business.

The tech giant recently revised its "risk factors" to its business, which the SEC requires publicly traded companies to disclose, in its latest 10-K filing.

This year, new mentions included the risks associated with the financial performance of future profits, "geopolitical tensions," and safety risks associated with AI features.

The company warned that new products may not be able to replicate the profit levels of its current offerings, which include its main moneymaker, the iPhone.

"New products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins," Apple wrote, "which can materially adversely impact the Company's business, results of operations and financial condition."

Apple also introduced new language warning of the potential impact of "geopolitical tensions" and safety risks associated with AI features, which did not appear in last year's version of the filing.

"The introduction of new and complex technologies, such as artificial intelligence features, can increase these and other safety risks, including exposing users to harmful, inaccurate or other negative content and experiences," Apple said.

"There can be no assurance the Company will be able to detect and fix all issues and defects in the hardware, software and services it offers," the company added. "Failure to do so can result in widespread technical and performance issues affecting the Company's products and services."

Apple has expanded its product lineup in recent years to include new categories like the Vision as it searches for new revenue drivers amid increased smartphone competition.

The iPhone, Apple's cash cow, saw falling sales at the beginning of the year before returning to growth in the most recent quarter. Apple reported iPhone revenue increased 6% year over year in its fiscal fourth quarter. The tech giant is now betting that Apple Intelligence features will drive upgrades.

Morningstar analyst William Kerwin told Business Insider that investors shouldn't be alarmed by the updated wording in Apple's risk factors.

"We see pretty similar language across tech companies, and disruption risk along with new product risk are well-known risks already for Apple," he said. "I don't believe this portends anything that management might know or fear that isn't already in the market."

Forrester analyst Dipanjan Chatterjee told BI that the new language highlights a "significant consideration" for Apple. As the iPhone, which launched 17 years ago, enters its "sunset years," Chatterjee said Apple will need to consider a new long-term strategy.

"The big question for Apple is what comes next after the iPhone," he said. "What is the next paradigm shift, and will Apple be at the forefront of the movement?"

"The nature of consumer interactions will move 'off the glass' on the iPhone, and the shift will be fueled by highly immersive experiences like the conversational interface that has improved by leaps and bounds because of Gen AI," he added.

Tech giants, including Apple, have invested heavily in generative AI since ChatGPT arrived two years ago. Apple has been slower to integrate generative AI features into its products than rivals, but the first of its Apple Intelligence features rolled out on October 28.

The company is also betting on augmented reality, or "spatial computing" as Apple calls it, with the Vision Pro headset and reportedly exploring an entrance into the smart glasses market following Meta's success with AI Ray-Bans and its splashy "Orion" prototype demo.

"If Apple is not a party to the next evolutionary step change in consumer devices," Chatterjee said, "its business will be materially and adversely impacted."