CNN — Apple reported a first-quarter revenue of $90.8 billion on Thursday, marking a 4% decline compared to the previous year. The tech giant grapples with growth obstacles, notably in China, against a backdrop of economic uncertainty.
The corporation also unveiled a $110 billion share repurchase – its largest in history – as iPhone sales saw a 10% decline. This decrease indicates subdued demand for Apple’s iPhone 15 series, released in September.
Revenue from iPhone sales for the quarter ending March 31 totaled $45.96 billion, slightly below projected figures. Apple’s net income for the quarter decreased to $23.6 billion, a slight drop compared to the same period last year.
On a brighter note, Mac sales increased by 4% to $7.5 billion, and services revenue amounted to $23.9 billion, surpassing analyst expectations.
During an earnings call, CEO Tim Cook emphasized the positive aspects of the latest period and hinted at further details regarding the company’s vision for generative AI in the “weeks ahead.”
Additionally, Apple reported iPad revenue of $5.6 billion, down 17% year over year. This announcement comes just days before the company’s anticipated press event, where updates to its iPad lineup and related accessories are expected to be unveiled.
However, the company anticipates double-digit growth in its iPad business and services for the June quarter.
Revenue from Apple’s wearables, home, and accessories category, which includes AirPods, the Apple Watch, and Vision Pro, amounted to $7.91 billion, falling short of the estimated $8.28 billion, despite the launch of the Vision Pro.
This marks the first earnings report since the launch of Apple’s most significant new product in years, the $3,499 mixed reality Vision Pro headset. According to recent analysis, Apple invested billions in research and development for this device.
Apple analyst Ming-Chi Kuo recently revised the forecast for the headset, indicating a reduction in production by several hundred thousand units.
Cook noted that approximately 50% of Fortune 100 companies have acquired a Vision Pro headset “to explore things not possible yet.”
Following the report, Apple’s shares surged by over 7% in after-hours trading.
Challenges in China
Specifically, Apple has encountered obstacles in China due to factors such as nationalism, economic downturn, and intensified competition, which have impacted the company’s performance in recent months. Nonetheless, Cook mentioned during the call that iPhone sales have seen an increase in mainland China in the most recent quarter.
However, Chinese manufacturers like Huawei and Xiaomi have experienced significant growth as consumers who previously favored Apple are now opting for domestic brands in China.
According to market research firm IDC, Apple witnessed a remarkable 10% decline in global smartphone shipments in the first quarter of this year.
“At the time,” Nabila Popal, research director at IDC, told CNN, “It’s a significant decline for Apple, but considering the challenges we’ve faced over the past four years, Apple has arguably demonstrated the most resilience compared to other brands, navigating through supply chain disruptions and broader macroeconomic challenges.”
However, Cook stated on Thursday that the company achieved revenue records in over a dozen regions, including the Middle East, Canada, Spain, and Turkey.
Despite this, the company’s stock price has dropped by more than 8% in 2024, falling below $170 per share after reaching nearly $200 per share at various points over the past year. Despite facing numerous obstacles and threats, Apple has consistently managed to overcome them, attaining a market capitalization of $2.6 trillion, solidifying its position as one of the world’s largest and most influential companies.
Attention on AI
Cook hinted at the potential integration of generative AI tools into Apple products in the upcoming period, acknowledging that the company currently lags behind its competitors in this regard.
“We view generative AI as a significant opportunity across our product range and believe we possess distinctive advantages in this area,” he stated.
Apple is anticipated to unveil AI-driven features at its annual Worldwide Developers Conference scheduled for June. Additionally, there are reports suggesting discussions between Apple and OpenAI, the creator of ChatGPT, regarding the utilization of an iPhone chatbot.
“We will delve into this topic further in the coming weeks,” Cook concluded.
Photo by forbes
