image source, Getty Images
- author, Natalie Sherman
- role, bbc news
-
iPhone sales are declining in nearly every market around the world, according to Apple’s latest results.
The technology giant said overall demand for smartphones fell by more than 10% in the first three months of this year, with sales declining in all regions except Europe.
Apple said its overall sales fell 4% to $90.8bn (£72.5bn), the biggest drop in more than a year.
Still, the results weren’t as bad as expected, and Apple’s stock rose in after-hours trading in New York.
The company said the numbers were distorted by coronavirus-related supply disruptions, which led to unusually strong sales in the same period last year.
He cited upcoming product launches and investments in artificial intelligence (AI) and promised a return to growth in sales in the coming months.
In the case of iPhone, sales in the key Greater China market fell 8%. Cook sought to reassure investors about the state of business in the world’s second-largest economy, noting that iPhone sales are actually increasing in “mainland” China.
“I maintain a great view of China over the long term,” he said.
Competition from local rivals such as Huawei is intensifying in this market.
Gil Luria, senior software analyst at DA Davidson, said companies like Huawei are doing well in China “because they’re homegrown brands.”
“But in terms of features, functionality and prestige, the iPhone is still ahead of everything else,” he told the BBC’s Today programme.
“So consumers will buy an iPhone whenever they have the choice and the resources, and that’s no different in China.”
The company’s woes stood in contrast to the broader market, which has endured five of the past six consecutive quarters of declining sales.
Global smartphone shipments rose 10% in the first three months of this year, according to research firm Canalys, expanding after a long period of stagnation.
Luria said Apple hasn’t made any “significant improvements to its phones” since the iPhone 15 was released “about four years ago when we introduced 5G connectivity, which forced many consumers to upgrade their phones.” He said he did not.
He added: “What they hope now is that they can introduce enough new AI capabilities into the iPhone 16 when it launches later this year to finally drive the big iPhone upgrade cycle.”
Apple is also facing legal battles with U.S. and European regulators over app store fees.
A separate antitrust lawsuit against Google in the United States threatens the large payments Apple receives from the search giant in return for having Google as the default search engine for Safari, Apple’s internet browser.
Those payments amounted to about $20 billion in 2022, which helped boost Apple’s profits, according to court filings.
Pretax profit for the three-month period was flat at $28 billion, and the company said it would set aside $110 billion for share buybacks.
Finance chief Luca Maestri said Apple’s revenue is expected to increase by “low single digits” in the three months to June.
He added that the company will provide more guidance than it normally provides and expects double-digit growth in its services business.
Looking ahead, Angelo Gino, senior equity analyst at CFRA Research, said: “China is holding up better than expected and there are a number of upcoming events and triggers that could improve investor sentiment.”
