In this June 16, 2020 file photo, the sun reflects on Apple’s Fifth Avenue store in New York.
Mark Lennihan/AP
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Mark Lennihan/AP
In this June 16, 2020 file photo, the sun reflects on Apple’s Fifth Avenue store in New York.
Mark Lennihan/AP
Apple on Thursday revealed its sharpest quarterly decline in iPhone sales since the pandemic began, exacerbating a slump that is increasing pressure on the trendsetter to improve its products. its products with more artificial intelligence.
iPhone sales fell 10% year-over-year between January and March in the latest sign of weakness in a product that generates the majority of Apple’s revenue. It marked the biggest decline in iPhone sales since the July-September 2020 period, when production bottlenecks caused by factory shutdowns during the pandemic led to the release of the year model. that is delayed.
The current iPhone downturn is the main reason why Apple’s revenue in the latest quarter decreased 4% compared to last year to $90.8 billion. This is the fifth consecutive quarter that Apple’s revenue decreased compared to the previous year. Apple’s profits last quarter totaled $23.64 billion, or $1.53 per share, down 2% from last year.
But both Apple’s revenue and earnings per share were slightly higher than analysts expected, according to FactSet Research. Apple also predicts a modest increase in revenue for the April-June quarter from a year ago, which would end a recent streak of declines.
Part of the iPhone’s decline in the first three months of the year stemmed from a surge in sales during the same period last year as Apple said it was responding to pent-up demand caused by shipping delays caused by the pandemic. go out.
Even with some stumbles, Apple is still one of the most prosperous companies in the world. The Cupertino, California company achieved that goal by announcing a 4% increase in its quarterly dividend to 25 cents per share. The company also pledged to spend $110 billion to buy back its own shares, a move that was welcomed by investors but could spark criticism that Apple is spending more money to serve Wall Street than is to create more innovative products.
Supported by a share buyback commitment and increased dividends, Apple shares rose nearly 7% in extended trading after the news broke. Share prices have fallen 10% this year, erasing about $300 billion in shareholder wealth.
Although investors are disappointed by weak iPhone sales, they are also concerned Apple could lose its advantage as other tech giants like Microsoft and Google race to take the lead in artificial intelligence technology. , is expected to reshape industry and technology.
Investing.com analyst Thomas Monteiro said the latest quarterly report “leaves no doubt about Apple’s current situation.” “More than ever in the past decade, companies need new products and solutions.”
Apple is expected to reveal more AI services in June during its annual conference introducing the next version of its software for iPhone and Mac computers.
“We believe in the transformative power and promise of AI, and we believe we have advantages that will set us apart in this new era,” Apple CEO Tim Cook assured. analysts on Thursday’s call, promising more details to come soon.
Weak sales in China were again a factor in the most recent quarter, with revenue in the region falling 8% year over year to $16.37 billion as smartphone makers Competitor gains a foothold in one of the company’s largest markets. Even so, analysts had predicted an even bigger drop in results, giving investors a measure of relief.
Apple also had some bright spots last quarter, most notably in its services division, with revenue up 14% year over year to $23.87 billion.
The division derives a significant portion of its revenue from a lucrative deal that sees Google as the search engine that automatically answers queries on the iPhone – a deal at the heart of a now-concluding antitrust trial. ends with closing debates in Washington this week.
Commissions earned from digital transactions in iPhone apps are also a major source of revenue in Apple’s services division, an area that is being targeted US Department of Justice lawsuit accused the company of engaging in illegal monopolistic practices to prevent competition to the detriment of consumers.
That case is expected to take several years to resolve, but European regulators have forced Apple to allow more alternatives to its proprietary iPhone app store like part of the Digital Markets Act.
