– Apple reported a 10% drop in iPhone sales for the second fiscal quarter
– Slow adoption of AI may have influenced consumer decisions to hold off on purchasing new iPhones
– Despite hardware sales decline, the company managed to beat Wall Street expectations with growth in services revenue and a $110 billion stock buyback as well as plans for new iPad releases and chip advancements.
Apple reported a 10% drop in iPhone sales for the second fiscal quarter, attributed to a slowdown in China and consumers waiting for new features like AI that are lagging behind competitors. Despite this, the company beat Wall Street expectations and saw a 6% rise in stock after announcing a $110 billion stock buyback. Services revenue, including iCloud and Apple Music, jumped 14% and helped offset the decline in hardware sales.
CEO Tim Cook explained that last year’s revenue was inflated due to replenishing iPhone inventory after supply disruptions, making the revenue decline less severe when adjusted. CFO Luca Maestri expects continued growth in services and iPad sales throughout the year. Apple is expected to release two new iPads and the M4 chip, but faces competition in chip technology from Microsoft.
The company is also focusing on generative AI efforts, with potential integration of OpenAI’s ChatGPT and Google’s Gemini into future iPhones. Despite concerns about falling behind Google and Microsoft in AI, Apple is expected to make major announcements at WWDC in June. There are also reports of a new product announcement next week and excited anticipation for the Worldwide Developers Conference. Apple’s wearables and accessories sales, which include the Apple Vision Pro, have been lower than expected, but the company remains optimistic about the future of spatial computing.