Kevin Frayer/Getty Images/File
People look at the iPhone 15 and other Apple products at the flagship store in Beijing, China, in September 2023.
CNN
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Apple on Thursday reported first-quarter sales of $90.8 billion, down 4% from a year earlier, as the iPhone maker continues to struggle with growth challenges, particularly in China, amid an uncertain economic environment. .
The company also announced a $110 billion stock buyback, the largest in its history, as iPhone sales fell 10%. This decline suggests weak demand for Apple’s iPhone 15 lineup, which was launched in September.
The company reported iPhone sales of $45.96 billion for the three months ended March 31, which was slightly lower than expected. Apple’s net income for the quarter was $23.6 billion, down slightly from the same period last year.
The company also announced that Mac sales rose 4% to $7.5 billion and services revenue of $23.9 billion, exceeding analyst expectations.
During the company’s earnings call, CEO Tim Cook primarily focused on the bright spots in the recent past, hinting that the company would provide more details about its generative AI vision “in the coming weeks.”
Additionally, Apple reported iPad sales of $5.6 billion, down 17% year-over-year. The news comes just days before the company is scheduled to hold a press event where it is expected to announce updates to its iPad lineup and related accessories.
However, the company said it expects its iPad business and services to grow by double digits in the June quarter.
Apple’s Wearables, Home and Accessories division, which includes AirPods, Apple Watch and Vision Pro, posted sales of $7.91 billion, compared to expected $8.28 billion, despite the launch of Vision Pro.
This is the company’s first earnings report since the launch of its $3,499 Mixed Reality Vision Pro headset, its biggest new product in years. According to a recent analysis, Apple spent billions of dollars on device research and development.
Just recently, Apple analyst Ming-Chi Kuo posted his latest headset forecast, saying production would be cut by hundreds of thousands of units.
Cook said about 50% of Fortune 100 companies buy Vision Pro headsets “to explore things that aren’t yet possible.”
Apple shares rose more than 7% in after-hours trading following the news.
In particular, the company has lost momentum in China as nationalism, economic weakness and increased competition have hurt Apple in the past few months. But Cook said on the call that iPhone sales in mainland China were up in the latest quarter.
But consumers who once considered Apple are now turning to China’s national brands, and Chinese manufacturers like Huawei and Xiaomi are also making impressive profits.
According to market research firm IDC, Apple’s smartphone shipments worldwide fell by 10% in the first quarter of this year.
Nabila Popal said: “It’s a significant decline for Apple, but given where we’ve been over the last four years, Apple is probably the most resilient brand and has been exposed to more supply chain issues and macro issues than other brands. We have overcome many challenges.” IDC’s research director told CNN at the time.
But Cook said Thursday the company has set revenue records in more than a dozen regions, including the Middle East, Canada, Spain and Turkey.
The company’s stock price has fallen more than 8% to less than $170 per share in 2024, after reaching nearly $200 per share at various times over the past year. The company has overcome many hurdles and threats to reach a market capitalization of $2.6 trillion and become one of the world’s largest and most powerful companies.
Cook also hinted that generative AI tools could soon be included in Apple products, which currently lag behind competitors.
“We see generative AI as a significant opportunity across our products, and believe there are advantages there that set us apart,” he said.
Apple is largely expected to announce AI-powered tools at its annual Worldwide Developers Conference in June. It is also reportedly in talks with ChatGPT maker OpenAI to power the iPhone’s chatbot.
“We’ll be discussing that further as we go through the coming weeks,” Cook added.
