Apple announced a decrease in iPhone sales and a revenue forecast of $6 billion below expectations due to challenges in China.
This overshadowed strong first-quarter sales and profits, leading to a 3% drop in Apple shares after hours. Analysts were concerned that Apple would lose market share in Asia to competitors like Huawei and foldable phones.
CEO Tim Cook noted a mid-single-digit decline in China iPhone sales for the December quarter, attributing it partly to competitive pressures. China sales fell short of expectations at $20.82 billion. Apple expects current-quarter revenue to be $5 billion less than last year, with iPhone sales around $46 billion, below Wall Street forecasts. The anticipated revenue and iPhone sales have significantly declined since the COVID-19 pandemic began.
Despite these challenges, Apple’s first-quarter revenue and profit exceeded expectations, with iPhone sales growing 6%. Apple now has an installed base of 2.2 billion devices. Cook highlighted strong iPhone growth in emerging markets outside China. Meanwhile, tech giants Amazon and Meta saw share price increases after reporting quarterly results.
Apple, seen as behind in AI, plans to explore this area, with Cook mentioning internal work on generative AI. Sales in Asia, excluding China and Japan, exceeded expectations, with record iPhone sales in South Korea. Service business sales grew 11%, though slightly below forecasts. Apple faces new competition in Europe with a law allowing alternative app stores.
First-quarter Mac sales met expectations, while iPad sales and wearables, including AirPods and Apple Watch, experienced declines. The upcoming Vision Pro headset is expected to join the wearables segment but isn’t projected to significantly impact revenue immediately.
