Apple Beats Expectations with Sales and Profit Despite Decline in iPhone Sales
Apple has announced its financial results for the third quarter, reporting sales and profit that exceeded expectations. Despite a decline in iPhone sales, the company’s signature device performed well in China, helping it navigate the global decline in the smartphone market. Apple’s sales for the quarter fell by 1.4% to $81.8 billion (€74.7 billion), surpassing analyst expectations. While iPhone sales slightly missed estimates, strong sales in the services segment, which includes Apple TV+, and in China made up for it. Apple CEO Tim Cook explained that the increased research spending was driven, in part, by work on generative artificial intelligence (AI), a field that is also seeing increased investment from other major technology companies. Cook stated, “We’ve been doing research across a wide range of AI technologies, including generative AI, for years. We’re going to continue investing and innovating and responsibly advancing our products with these technologies to help enrich people’s lives.”
Apple finds itself in a delicate position as it competes with Android rivals in a mature smartphone market, while its next big product, the Vision Pro mixed-reality headset, is not yet available to consumers. While competitors like Microsoft and Google are investing billions in AI technologies, Cook emphasized that AI features would be integrated into Apple products. One such feature will be the iPhone’s ability to transcribe voicemail messages in real-time, starting this autumn.
Despite a challenging market, Apple appears to have outperformed in China, which has experienced its weakest smartphone market in almost a decade. Cook mentioned, “We also set quarterly records in China for both wearables, home, and accessories, and services.” He also noted that the installed base of iPhones reached a new high, although specific numbers were not provided. Apple’s wearables business, which includes the Apple Watch and AirPods, generated $8.28 billion in revenue. Mac and iPad sales amounted to $6.84 billion and $5.79 billion, respectively. Cook also revealed that almost half of the Mac buyers during the quarter were new to the product, and there was strong upgrader activity to Apple Silicon.
In other tech news, Amazon has forecasted third-quarter revenue above expectations, attributed to its successful Prime Day sale event in July. The company’s cloud-computing division, Amazon Web Services (AWS), has seen a slowdown in growth in recent quarters. However, the company remains optimistic about its future performance.
While Apple and Amazon continue to thrive, there have been signs of weakness in other parts of the tech industry. Qualcomm, the largest maker of smartphone processors, experienced an 8% drop in its shares after providing a tepid sales forecast for the current quarter, indicating weak demand for mobile devices. It is worth noting that Qualcomm has a research facility located in Cork, Ireland.
Overall, despite challenges in the smartphone market, Apple has managed to surpass expectations with its sales and profit for the third quarter. The company’s focus on AI research and development, along with its strong performance in China and other segments, has contributed to its success. As Apple continues to innovate and introduce new features, it remains a key player in the tech industry.