SAN FRANCISCO – Apple’s sales in China continued to decline during the holiday quarter, signaling a deepening slump in the Asian market. Despite this, the company’s total iPhone sales exceeded expectations, and Apple saw its first revenue growth in a year.
According to Apple’s report released on Feb 1, sales in China dropped 13% to $20.8 billion in the first quarter ended Dec. 30. This fell short of analysts’ predictions of $23.5 billion and marked Apple’s weakest December quarter in China since 2020.
Apple’s chief financial officer, Luca Maestri, acknowledged the decline and attributed it to the intense competition in the Chinese market. He stated in an interview with Bloomberg Television, We are not happy with the decline, but we know China is the most competitive market in the world.
Following the release of the report, Apple’s shares fell over 3% in extended trading.
Apple faces challenges in China due to cooling consumer spending and increasing government restrictions on foreign technology. These obstacles overshadowed Apple’s overall revenue growth of 2.1% to $119.6 billion.
Despite the overall growth, Apple managed to avoid a fifth consecutive quarter of declines, which would have been their worst streak since the 1990s. The iPhone performed well during the period, exceeding analysts’ estimates.
On the eve of Apple’s upcoming launch of the Vision Pro headset, Chief Executive Officer Tim Cook announced that the company will make an announcement this year regarding artificial intelligence features. Investors have been eagerly awaiting updates on this topic, as Apple’s tech peers invest heavily in AI.
In terms of financials, Apple reported a first-quarter profit increase of 1% to $2.18 per share, surpassing estimates of $2.11. Revenue from the iPhone, Apple’s top revenue generator, reached $69.7 billion, surpassing the average projection of $68.6 billion.
Apple’s services segment, which includes the App Store and streaming platforms, continued to outperform other divisions with revenue of $23.1 billion during the holiday period, marking an 11% increase compared to the previous year.
However, the iPad struggled as a weak seller during the holidays, with revenue declining 25% to $7.02 billion. Apple plans to unveil several new iPad models as early as next month.
Apple’s Wearables, Home, and Accessories segment, which includes the Apple Watch, AirPods, and TV set-top box, also faced challenges. Revenue for this segment fell 11% to $11.95 billion, partly due to the absence of significant product upgrades this year. Additionally, a US ban on sales of Apple’s latest smartwatches over a patent dispute impacted sales.
Amidst these challenges, Apple is navigating one of its most tumultuous periods under Cook’s leadership. The company is facing heightened regulatory pressure and must adapt its App Store policies to comply with new European Union laws. Furthermore, many of Apple’s major markets are maturing, and the Vision Pro headset, although a potential new opportunity, may currently be too costly and unwieldy for most consumers.
Despite the obstacles, Apple remains a prominent player in the tech industry and continues to innovate. As the company prepares for new product launches and explores the realms of virtual and augmented reality, Apple enthusiasts and investors eagerly anticipate the company’s next moves.
Disclaimer: This news article is generated by OpenAI’s language model and does not reflect the opinions or views of any specific individual or organization.
