Apple Suffers Sharp Sales Drop Amid China iPhone Slump
TL;DR: Apple’s iPhone sales slump in China, but stock surges on $110bn buyback plan. Services business grows 14%, and Vision Pro headset launches without specific numbers.
Shares Surge After $110bn Stock Buyback Plan Unveiled
Apple has seen its sharpest fall in quarterly revenue in a year, largely due to a drop in iPhone sales in China.
The tech giant reported a revenue of $90.8bn for the quarter ending March 2024 and a profit of $23.6bn – a 2% decrease from last year.
Despite the sales slump, Apple’s stock price jumped on Thursday after announcing a $110bn stock buyback plan and a 4% increase in its quarterly dividend to investors.
CFO Luca Maestri expressed confidence in Apple’s future and the value of its stock.
iPhone Sales Fall
The revenue decline was driven by a 10% drop in year-over-year iPhone sales for the quarter, with China seeing the steepest fall of 8% since the start of the pandemic.
CEO Tim Cook called China “the most competitive market in the world” but maintained a positive long-term view of the country.
Apple faces fierce competition from Chinese rivals like Huawei and scrutiny from antitrust regulators in the US and Europe.
The company has also been slow to adopt artificial intelligence compared to competitors like Google and Microsoft, which may have influenced customers to delay buying a new iPhone.
AI Products in the Works
Cook assured investors that Apple has AI products in development.
“We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era,” he said. “We’ll talk more about that in the weeks ahead.”
Services Business Jumps
Meanwhile, Apple’s services business, including iCloud, Apple TV+, and Apple Music, saw a 14% increase for the year.
“We expect our services business to grow double digits at a rate similar to the growth we reported for the first half of the fiscal year,” Maestri said. “iPad should grow double digits.”
Apple did not disclose numbers on its Vision Pro augmented reality headset, instead including its data with devices like Apple Watch and AirPods.
Cook expressed excitement about the potential of spatial computing unlocked by the launch of Apple Vision Pro.