Apple has had many challenges to start the year. The Apple Watch has been modified by patent lawsuits, the App Store has come under fire from developers, and the iPhone has faced renewed competition in China.
To make matters worse, the company was recently dethroned as the undisputed king of the stock market when Microsoft replaced it as the most valuable public company in the world.
But on Thursday, the tech giant showed the versatility and strength of its business, reporting that sales rose 2 percent to $119.58 billion during the three months ending in December. It was Apple's first quarterly revenue increase in a year and helped the company generate $33.92 billion in profit during the period, an increase of 13 percent. from a year before.
The results showed that Apple had the ability to overcome a slowdown in device sales by getting its huge customer base to buy more apps and services, such as Apple Music. The company said software and services sales rose 11 percent to $23.12 billion during the period.
Apple shares fell about 1 percent in after-hours trading, even though the company beat analyst expectations of $117.99 billion in sales.
Although its flagship products, the iPhone and iPad, are more than a decade old, Apple said the number of its devices in use worldwide last year had increased by 200 million from the two billion it reported a year ago. Investors are watching that figure closely because as iPhones, iPads and Apple Watches proliferate, more people are willing to pay Apple for things like cloud computing storage.
The iPhone, which accounts for more than half of Apple's annual revenue, was the only Apple device to see an increase in sales during the quarter. Apple's launch of a new titanium version of the device last year helped it increase the number of smartphones sold by five million, according to Canalys, a market research firm. The rebound lifted iPhone sales 6 percent to $69.7 billion.
But sales of iPads and wearable devices like Apple Watches declined, and Mac sales remained stable, affecting the company's total device sales, which were almost the same as the previous year, at $96.46 billion. .
Apple spent the days before Christmas warning its customers that it was going to have to suspend sales of its Apple Watch because it lost a patent case over the device's pulse oximetry feature. To continue sales, it revised the software on its new watches and removed the feature.
In China, Apple's second-largest market, the company is experiencing a slowing economy and increased competition. Chinese consumers are cutting back on spending, while Huawei, the Chinese mobile phone giant, has launched a smartphone with high-quality cameras and lower prices than Apple. To keep pace, Apple has started offering discounts on iPhones in China.
Apple's growth lagged behind gains posted by other tech giants. On Tuesday, Microsoft said its quarterly revenue had risen 18 percent to $62 billion, while Alphabet, Google's parent company, reported a 13 percent increase in sales.
The value of those companies has skyrocketed as they have adopted generative artificial intelligence, something that Apple has been slower to embrace. Tim Cook, the company's chief executive, said last year that they were working on ai, but declined to give further details.
Instead, Apple has focused on launching an augmented reality headset, the Vision Pro. The company put the device, which costs $3,500, on sale in mid-January and sold out its first batch of about 200,000 headsets, according to analyst estimates. It will begin shipping the device on Friday.
