Apple's CEO predicts a return to growth even as sales fall short of expectations.

Tim Cook, the CEO of Apple, said the company is "looking forward to sharing some very exciting things" at its events this year and is investing a lot in generative AI.

Tim Cook, the company's chief executive, told Reuters that Apple anticipates a return to sales growth in the current quarter as it invests in AI technologies that will be announced in the upcoming months. On Thursday, May 2, the business reported a less dramatic than anticipated decrease in quarterly revenue.

LSEG data shows that Apple's fiscal second-quarter revenue decreased 4% to $90.8 billion, exceeding the average analyst forecast of $90.01 billion.

Cook told Reuters that the iPhone manufacturer anticipates overall revenue to "grow low-single digits" for the current quarter, which ends in June. Based on LSEG data, Wall Street projects a 1.33% increase in revenue to $82.89 billion.

Apple's business is beset by numerous obstacles. Competitors in the smartphone market, like Samsung Electronics, have unveiled gadgets designed to house chatbots with artificial intelligence.

Regulation-wise, Apple's services division—which is home to the lucrative App Store and was one of the few areas of growth in the company's fiscal second quarter—is under pressure from a new law in Europe. In March, the US Department of Justice accused Apple of monopolizing the smartphone market and charging exorbitant prices.

In contrast to expert projections of $46 billion, iPhone sales for the fiscal second quarter decreased 10.5% to $45.96 billion. In February, Apple officials stated that the business recovered from supply-chain bottlenecks caused by pandemic lockdowns by a $5 billion spike in iPhone sales during the previous year's fiscal second quarter.

Even though the Cupertino, California-based corporation faces intense competition for its flagship product, iPhone sales did decline slightly when that one-time event was taken out of the equation. In China, Huawei Technology's market share has grown.

Cook reported that there was still "growth in some markets, including China" for iPhone sales.

However, Visible Alpha data shows that Apple's revenue fall in China was less severe than experts had predicted, with Greater China sales of $16.37 billion for the fiscal second quarter that ended on March 30, down 8.1% and above analyst projections of $15.59 billion.

Regarding artificial intelligence, a technology rivals Microsoft and Alphabet's Google are heavily betting on, Apple has not disclosed many details about its product ambitions. According to Cook, the corporation has invested more than $100 billion in research and development over the last five years. The company started raising its R&D expenditures the previous year.

"We're making significant investments and we remain very bullish about our opportunity in generative AI," he stated. At events later this year, Cook stated, "We're looking forward to sharing some very exciting things with our customers."

LSEG data shows that Apple's quarterly earnings per share came in at $1.53, exceeding Wall Street projections of $1.50.

LSEG data shows that sales in Apple's services division, which also includes Apple Music and TV products, increased to $23.87 billion, above analyst estimates of $23.27 billion.

According to LSEG data, Mac sales increased to $7.5 billion in the fiscal second quarter, above analysts' predictions of $6.86 billion. Analysts had predicted that Mac sales would drop.

Cook added, "They were really motivated by the new MacBook Air's strength, which is powered by the M3 chip." "During the quarter, about half of our MacBook Air customers were first-time Mac users."

Sales in the iPad division for the company decreased to $5.56 billion, falling short of analyst estimates of $5.91 billion.

LSEG data shows that the company's wearables division, which includes sales of Apple Watches and AirPods headphones, had a decline in sales to $7.91 billion from analyst projections of $8.08 billion.

News source:

https://www.rappler.com/technology/apple-sales-fall-less-than-expected-fiscal-q2-2024/