Apple announced its quarterly results, which slightly surpassed Wall Street expectations, but iPhone sales remained unchanged compared to the previous year as the company faces increased competition from local manufacturers in China.
For the December quarter, Apple reported revenue of $124.3 billion, exceeding analysts’ forecasts of $124.1 billion and representing a 4 percent increase from the same quarter last year. iPhone sales amounted to $69.1 billion, showing little change year-on-year.
This quarter marks the first full reporting period since the launch of “Apple Intelligence,” a collection of artificial intelligence features developed in collaboration with OpenAI.
Apple’s Chief Financial Officer Kevan Parekh expressed significant optimism regarding the substantial impact of AI on their products. He noted that the sales performance of the AI-equipped iPhone 16 outperformed in markets where Apple Intelligence was not implemented, indicating consumer interest in these new features.
Parekh took up his position this year, succeeding Luca Maestri, who held the role for ten years.
In the China region, where Apple’s competition has intensified from local brands like Huawei and Xiaomi, revenue reached $18.5 billion, a decline of approximately 11 percent.
The company’s services segment, which encompasses the App Store, iCloud, and Apple Pay, achieved record revenues of $26.3 billion. Additionally, sales of iPads and MacBooks experienced double-digit growth.
Overall net income reached $36.3 billion, exceeding expectations of $35.5 billion, with diluted earnings per share reported at $2.40, also above market predictions.
These results come amid rising concerns about a potential new tariff regime under President Donald Trump, who recently indicated a plan to impose tariffs on Taiwanese semiconductor manufacturers. Apple’s supply chain is heavily reliant on Asian exporters.
Parekh refrained from commenting on the potential tariff impacts, stating that the company is “closely monitoring the situation.”
Following the earnings report, Apple’s stock remained stable during after-hours trading, despite recent volatility affecting tech stocks, particularly a significant downturn in Nvidia’s shares due to fears stemming from developments in AI from China.
Despite these challenges in the tech sector and a $600 billion loss in Nvidia’s market capitalization, Apple retains its position as the world’s most valuable company, valued at approximately $3.6 trillion.
Prior to the earnings announcement, analysts were skeptical about whether the phased implementation of Apple Intelligence had a substantial short-term effect on hardware sales.
photo credit: www.ft.com
