At a time when the tech industry’s biggest companies are recovering from a post-pandemic slump, Apple is suffering its longest sales decline in more than a decade.
On Thursday, the world’s most valuable technology company said sales fell 1 percent to $89.5 billion from a year ago during the three months ending in September, ending a fiscal year in which it saw declines. in sales each quarter. The company reported that profits rose 11 percent to $22.96 billion.
Apple’s biggest business, the iPhone, rebounded last month thanks to the launch of four new devices, which increased sales 3 percent to $43.81 billion from last year. And sales of the company’s software and services, such as Apple Music and cloud storage, rose 16 percent to $22.31 billion.
But sales plunged across most of the company’s other businesses, including Macs, iPads, Apple Watches and AirPods. Total product sales fell 5 percent to $67.18 billion.
The results beat Wall Street expectations of $89.34 billion in sales and $21.77 billion in profits. The company said it expected sales in the current quarter to be similar to the same period a year earlier, disappointing Wall Street, which had projected sales would increase from a year earlier.
Apple shares have fallen 11 percent from their peak this summer and fell more than 3 percent in after-hours trading Thursday.
Apple CEO Tim Cook faces a number of challenges in the coming year. After a surge in demand for new 5G iPhones, wireless carriers are reporting a slowdown in the number of people buying new smartphones in the United States, Apple’s largest market, according to Arete Research, a research firm. investments.
The company said supply constraints for the iPhone 15 in September affected sales during the month, but that supplies were improving and could meet demand in the current quarter.
In China, Apple faces renewed competition from Huawei in the luxury smartphone business. The Chinese smartphone maker had been hampered in recent years by US restrictions on its access to 5G technology and Android software, but in August it revealed a jade green smartphone, the Mate 60 Pro, that has the same capabilities. than many iPhones. His post was followed by the Chinese government ordering employees at some government agencies to stop using iPhones for work.
Sales of Apple’s new flagship iPhones decreased 4.5 percent during the last weeks of September last year, according to Counterpoint Research, which analyzes the smartphone market. The drop was a consequence of the broader slowdown in consumer spending in China, the firm said.
Last month, China expanded its challenge to Apple’s business by launching a regulatory review of the company’s largest iPhone maker, Taiwan’s Foxconn. The manufacturer faces a tax audit and is being investigated for its compliance with land use regulations. The scrutiny comes as Foxconn founder Terry Guo runs for Taiwan’s presidency in a campaign that could boost the ruling party, which opposes closer ties with Beijing.
Mr. cook tech/apples-tim-cook-makes-surprise-china-visit-as-iphone-sales-slump-94ed2fa7″ title=”” rel=”noopener noreferrer” target=”_blank”>traveled to China last month on an unannounced visit that included stops at an Apple store, a visit to the factory of Luxshare Precision, a Chinese iPhone maker, and a meeting with Wang Wentao, Minister of Commerce of the country..
“I couldn’t be more excited about the interactions I’ve had with customers and employees,” Cook said during a call with analysts Thursday. He said the company’s business in China remained strong, adding that the iPhone business set a record in mainland China during the three months ending in September.
The broader tech industry has been fueled by enthusiasm for generative artificial intelligence. Last month, Microsoft reported that investments in ai were starting to help sales of its cloud computing business. Google’s parent company, Alphabet, which has invested heavily in ai, disappointed investors who had expected a greater increase in sales. Amazon and Meta Platforms, Facebook’s parent company, also highlighted their investments in this area.
But Apple, which is known for its secrecy, has remained silent about its plans for generative ai. On Thursday, Cook said the company was investing in generative ai but was unlikely to provide details until it had a product to bring to market. “We’ll do it responsibly and over time we’ll see advancements in products where those technologies are critical,” Cook said.
Looking ahead to next year, much of the company’s focus will be on launching its first major new product since 2014: high-tech glasses that combine the real world with virtual reality. The $3,500 device, the Vision Pro, has the potential to provide a new revenue stream at a time when sales of its other products have slowed. Analysts project that Apple will sell less than half a million units.
The company is also focused on reviving sales of its iPads and Macs. On Monday, Apple revealed new MacBook Pros and iMacs with faster processors and encouraged customers with older Macs to upgrade. Mac sales fell 27 percent to $29.36 billion during the last fiscal year.
