Apple Reports Sales Drop Across Most Countries

• Apple reports a decline in sales across most global markets, except Europe, with smartphone demand down by 10% year over year.
• Despite challenges, Apple remains optimistic about future growth through product releases, investments in AI, and expectations of rising sales in the coming months.

According to recent results from this tech titan, Apple sales have decreased across almost every global market since 2017.

Smartphone demand has declined by 10% year over year in this year’s first three months, and overall sales have decreased across every geographic region except Europe.

Apple reported that overall revenues fell 4% year-on-year to $90.8bn (£72.5bn), marking its biggest monthly decrease for more than 12 months. Yet, after-hours trading in New York showed the stock was higher than predicted.

The company stated its figures had been affected by Covid-related supply disruptions that resulted in unusually strong sales during this same time last year. They anticipate their sales will resume growing with future product releases and investments into artificial intelligence (AI).

Overall sales in the Greater China market dropped by an 8% decline, prompting Mr. Cook to attempt to assure investors about its state in one of the world’s second-biggest economies, noting iPhone sales were actually up in “mainland” China. He stated, “I maintain a great view of China in the long term,”

Competition within China’s market has intensified due to local rivals like Huawei. Gil Luria, the senior software analyst of DA Davidson, said companies such as Huawei do well because “it is the homegrown brand.”

“But in terms of features, functionality and prestige, iPhone still has an advantage over any other handset,” according to his remarks on BBC’s Today programme.

“So any time consumers get the choice and have the resources they’re going to buy an iPhone – that’s not any different in China.”

One company’s struggles—which had experienced sales declines for five of the last six quarters—were in stark contrast to wider market fluctuations.

According to research firm Canalys, global smartphone shipments experienced an unprecedented 10% surge during the first three months of 2019. After several years of stagnant smartphone growth, smartphone sales experienced significant expansion.

Mr Luria pointed out that Apple hasn’t introduced “significant improvements to the handset”  since the iPhone 12 was launched almost four years ago “when Apple introduced 5G connectivity, which compelled a lot of consumers to upgrade the phone”.

“What they’re hoping for now is that they can introduce enough new AI features into the iPhone 16 which will come out later this year in order to finally drive a big iPhone upgrade cycle.” according to Heeney.

Apple is also involved in legal battles against regulators within the US and European regions over app store fees, among other legal battles over app development fees.

Apple may face consequences from an antitrust case filed in the US against Google over lucrative payments it receives as compensation for making Google its default search engine on Safari, its internet browser.

Court filings indicate that these payments amounted to approximately $20 billion in 2022 and helped boost Apple’s profits. Pretax profit for the quarter was steady at $28 billion, while Apple announced they set aside an amount equal to this total to buy back shares—amounting to an investment of some $110 billion over time.

Finance chief Luca Maestri announced that Apple sales were expected to rise by “low single digits” over the three months leading up to June, offering more guidance than would normally be provided by their company. Double-digit growth for the services business is expected.

Angelo Zino, senior equity analyst of CFRA Research stated “China is holding up better than expected and there are a host of upcoming events/catalysts on the horizon that could improve investor sentiment.”

Source: BBC