Apple suffers steepest sales fall in a year amid China iPhone slump
Apple has suffered its steepest decline in quarterly revenue in a year, driven in large part by a slump in iPhone sales in China.
The American tech giant reported a revenue of $90.8bn for the quarter ending March 2024 and a profit of $23.6bn – a 2 per cent dip compared to last year.
In spite of the sales slump, the company’s stock price surged on Thursday after it announced a $110bn stock buyback plan and a 4 per cent increase in its quarterly dividend to investors.
“Given our confidence in Apple’s future and the value we see in our stock, our board has authorised an additional $110bn for share repurchases,” CFO Luca Maestri said.
“We are also raising our quarterly dividend for the 12th year in a row.”
The revenue decline was fuelled by a 10 per cent fall in year-over-year iPhone sales for the quarter, with China seeing a fall of 8 per cent, the steepest drop in the sales of its signature smartphone since the beginning of the pandemic.
Apple boss Tim Cook called China “the most competitive market in the world” but said he maintained “a great view” of the country in the long term.
The company faces strong competition from Chinese rivals like Huawei and scrutiny from antitrust regulators in the US and Europe.
Apple has also been slow to adopt artificial intelligence compared to its competitors like Google and Microsoft which may have influenced the decision of customers to hold off on buying a new iPhone.
Mr Cook assured investors on Thursday that the company has AI products in the works.
“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.”
Meanwhile, Apple’s services business, including the iCloud, Apple TV+ and Apple Music, jumped 14 per cent 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,” Mr Maestri said. “iPad should grow double digits.”
Apple did not reveal numbers on its Vision Pro augmented reality headset, instead including its data to a list that included devices like Apple Watch and AirPods.
“During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks,” Mr Cook said.
