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Apple reported a decline in profits and revenue in its fiscal second quarter, the fifth decline in the last six periods due to sluggish sales of its flagship iPhone and competition from new Chinese products. The decline was smaller than expected, however, and Chief Executive Tim Cook told Reuters that the company expects a modest return to sales growth starting in the current quarter and then through investments in artificial intelligence capabilities that will be revealed in the next months. This was enough for Wall Street to push the stock up by as much as 7% after a weak start to the year on the stock market. A key contribution was also made by the announcement of a new record share buyback of 110 billion, higher than last year’s 90 billion.
New quarter of downturns
Apple closes the second quarter of the fiscal year with revenues of 90.75 billion dollars, down 4.3% on the same period last year but above analysts’ expectations. Net income fell 2.2% to $23.63 billion, or $1.53 per share. Obvious symptom of a loss of enamel that has been dragging on for months. Samsung, which has introduced devices aimed at hosting artificial intelligence chatbots, once again snatched the crown of queen of smartphones by market share between January and March, according to data from specialized company IDC. iPhone shipments slipped nearly 10 percent in a quarter that saw the market expand 8 percent. For Apple’s current quarter, which ends in June, Cook told Reuters that he expects “single-digit growth” in overall revenue. According to Lseg data, Wall Street expects revenue growth of 1.33% to $82.89 billion.
EU regulations and US antitrust have an impact
The authorities’ investigations into the power of Big Tech and suspicions of abuse of a dominant position are also causing concern for Apple. On the regulatory and antitrust front, Apple’s services business, which includes the profitable App Store and was one of the few areas of growth in the fiscal second quarter, is under pressure from European regulations. In the United States, the Department of Justice also accused Apple in March of monopolizing the smartphone market and driving up prices.
The iPhone ailments
The business woes, however, are concentrated in the iPhone. For the quarter, iPhone sales fell 10.5% to $45.96 billion, compared to analysts’ expectations of $46 billion. And observers considered the last three models disappointing. But Apple executives said in February that the same period last year had benefited from a $5 billion surge in iPhone sales as the company recovered from supply chain problems during pandemic lockdowns. Therefore, excluding this occasional phenomenon, iPhone sales have decreased only slightly despite the fact that the Cupertino company’s product faces strong competition: in China, Huawei Technology has gained market share and seen its sales rise by 70% according to some estimates. Cook also said that iPhone sales today continue to see “growth in some markets, including mainland China.” And Apple’s revenue decline in China was itself not as steep as analysts feared, with Greater China sales of $16.37 billion for the fiscal second quarter ended March 30, down 8 percent. .1% and above analysts’ expectations of $15.59 billion. Financial director Luca Maestri defined China, Apple’s third largest market in the world, as the most competitive today.
Apple, Tim Cook inaugurates the new store in Shanghai
Mystery about the plans of artificial intelligence
Apple has said little about its product plans for artificial intelligence, the technology that rivals Microsoft and Alphabet’s Google are betting big on. The company began increasing spending on research and development last year, and Cook said the company has spent more than $100 billion on research and development over the past five years. “We continue to feel very optimistic about our opportunity in generative AI and are making significant investments,” he said. “We look forward to sharing some really cool things with our customers” at events later this year, Cook said.