Apple recently reported a decline in iPhone sales across most global markets except for Europe.
The company’s overall smartphone demand dropped by over 10% in the first quarter of this year, leading to a 4% decrease in revenues to $90.8 billion.
This decline, the largest in over a year, was attributed to Covid-related supply disruptions. Despite this, Apple’s share price rose in after-hours trading.
Tim Cook, Apple’s CEO, acknowledged the challenges but expressed optimism, citing upcoming product launches and investments in artificial intelligence (AI) as drivers for future growth.
He reassured investors about China, where iPhone sales dropped by 8%, stating that sales were up in “mainland” China.
Regarding competition in China, analysts noted Huawei’s success as a homegrown brand but emphasized the iPhone’s advantages in features, functionality, and prestige.
Despite Apple’s recent sales declines over multiple quarters, the wider smartphone market saw a 10% growth in shipments in the first quarter, according to Canalys.
Analysts highlighted the need for significant improvements to the iPhone, especially since the introduction of 5G with the iPhone 15 four years ago.
They speculated that the upcoming iPhone 16, expected later this year, would need compelling AI features to drive a substantial upgrade cycle.
Apple is also dealing with legal challenges, including antitrust lawsuits over its app store fees and a separate lawsuit against Google.
These legal battles could impact Apple’s profits, particularly the payments it receives from Google for being the default search engine on Safari.
Despite these challenges, Apple’s pre-tax profit remained flat at $28 billion for the quarter, with plans to buy back $110 billion worth of shares.
The company expects sales to rise in the low single digits in the coming months, with double-digit growth projected for its services business.
Analysts remain cautiously optimistic, citing potential catalysts for improved investor sentiment in the future.
Source-BBC
