With slow iPhone sales, Apple's recent earnings report showed a revenue drop. Despite this setback, the tech behemoth exceeded Wall Street's forecasts, sending its shares up after-hours.
In a pre-call statement, Apple CEO Tim Cook reported $90.8 billion in March quarter services revenue, a record. The company's sales fell 4% year-over-year but outperformed expected earnings of $90.1 billion, The Guardian reported.
Apple also raised its cash dividend to $0.25 per share by 4%. However, iPhone revenue fell 10% to $45.96 billion from last year, below Wall Street's projection of $46 billion. Reports also indicated board clearance for a $110 billion stock buyback.
Apple Facing Stiff Competition
Apple's iPhone sales fell in the first quarter as Huawei gained market share, notably in China. Apple surpassed Samsung as the world's leading smartphone vendor last year, but Samsung recaptured the top rank in 2024 with a smaller volume reduction.
Tim Cook Cook and Apple CFO, Luca Maestri, addressed worries about the company's performance in China during the earnings call's Q&A session, noting a reduction in demand but highlighting a better condition than expected.
Cook also announced large generative AI investments in the coming quarter, following Amazon, Alphabet, Microsoft, and Meta. He called the MacBook Air the "best consumer laptop for AI."
He stressed that Apple continues to "feel very bullish" about its chance in generative AI. "We are making significant investments, and we're looking forward to sharing some very exciting things with our customers soon," Cook said during the call.
After canceling its electric vehicle project in February, Apple prioritized AI projects. After cutting departments, the business laid off workers and ended Titan's decade-long autonomous EV effort. Apple's decision to cancel Project Titan startled the public and its staff, despite its projected $10 billion cost.
Apple has been more cautious about its generative AI efforts than Microsoft and Google. However, it is apparently building an AI research hub in Zurich and attracting AI experts. Apple has also published AI research papers, suggesting new product features.
Apple's voyage into generative AI is less documented, but experts expect the company to reveal more smartphone AI ideas later this year.
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(Photo : YASUYOSHI CHIBA/AFP via Getty Images)
Apple CEO Tim Cook reacts as he leaves the Apple Developers Academy during his visit to Indonesia in Tangerang, a suburb of Jakarta, on April 17, 2024.
Apple Investors Raise Concerns Over AI Development
The Vision Pro, Apple's first new product since the 2015 Apple Watch, is a mixed-reality headset. Its sales impact is modest. According to Al Jazeera, Apple also faces perceptions of falling behind Microsoft and Google in AI technology development.
Apple CEO Tim Cook addressed investor worries in a Thursday conference call, highlighting the company's AI work. He promised to discuss Apple's AI projects in the coming weeks.
TechTimes previously reported that Apple rival Samsung regained its global leadership with a 20.8% market share and 60.1 million smartphone sales in Q1. Apple recorded a 17.3% market share and sold 50.1 million units during the period.
Samsung Electronics' first-quarter 2024 financial performance was good, up from last year. As memory chip sales recovered, operating profit rose by over 930%.
Demand for AI-specific servers, memory, and storage fuels this rebirth. Q1 2024 saw Samsung's memory chip division return to profitability after 2023 macroeconomic issues. Demand for DRAM, NAND, SSDs, and servers drove prices.
In 2023, Samsung's quarterly revenues grew 12.8% to KRW 71.2 trillion ($52.2). TechCrunch announced a 330% increase in net profit to KRW 6.75 trillion ($4.88 billion).
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