Apple revealed its largest quarterly decline in iPhone sales since the July-September period in 2020 during the pandemic, placing additional pressure on the tech giant to step up its artificial intelligence efforts. Apple iPhone sales for January-March dropped 10 percent year-over-year, as its top product faced increased competition from Huawei in China, Apple’s third-largest market. Apple’s quarterly revenue decreased 4 percent from the same period last year to $90.8 billion, marking the fifth dip in the past six quarters for the company. Apple’s $23.64 billion profit for the quarter represents a 2 percent reduction from last year. Still, Apple shares rose in after-market trading.

According to FactSet Research, the company’s revenue and earnings per share were slightly higher than analysts projections. The Wall Street Journal reports that “shares of Apple rose more than 7 percent in after-market trading as the company authorized $110 billion in stock buybacks and signaled that the current quarter is likely to see revenue growth.”

Steering consumers toward the company’s iPhone 15 Pro Max — with a starting price of $1,200 — has not proven a successful strategy in the current smartphone climate.

“For the first three months of the year, Samsung reclaimed the number one spot for worldwide smartphone market share, according to research firm IDC. Apple’s iPhone unit shipments slipped nearly 10 percent for the quarter over the previous year, while the total smartphone market expanded about 8 percent annually,” notes WSJ.

“Revenue from iPhones, iPads and wearables like the Apple Watch declined from the same quarter last year, while sales of software and services rose,” explains The New York Times. “Profit fell 2 percent to $23.64 billion, Apple’s first quarterly decline in a year.”

Increased competition in China continues to be a problem for Apple. “In China, Huawei’s smartphone sales rocketed up nearly 70 percent from the previous year,” WSJ reports, “while Apple’s sales fell 19 percent, according to Counterpoint Research.”

Meanwhile, tech leaders such as Alphabet, Amazon and Microsoft have reported significant quarterly profits in recent weeks due, in large part, to cloud computing, online advertising and investments in generative artificial intelligence. Some investors are concerned that Apple is not moving quickly enough in AI.

“Investors hope that will change in June when Apple holds its annual developers’ conference and reveals its newest software,” notes NYT.

“We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era, including Apple’s unique combination of seamless hardware, software and services integration, groundbreaking Apple’s silicon, with our industry-leading neural engines and our unwavering focus on privacy, which underpins everything we create,” Apple CEO Tim Cook told analysts yesterday.

Related:
Apple Might Start Developing Its Own AI Chips, TechRadar, 4/25/24
Apple Quietly Beefs Up Its AI Division with Acquisition of French Startup, Fast Company, 4/22/24
An Apple Insider Just Revealed How iOS 18’s AI Features Will Work, Digital Trends, 4/22/24
Apple Anticipates iPhone Sales Drop Before AI Gets into New Models, Inc., 5/1/24
iPhone Flip: Everything We Know About Apple’s Foldable Plans, CNET, 5/3/24
Apple Giving the iPad Pro an OLED Display Has an Unexpected Smart Benefit, ZDNet, 5/2/24