Apple sees the biggest fall in sales for a year
In five out of the last six quarters, Apple’s performance stands in stark contrast to the broader market trends. Globally, smartphone shipments experienced a 10% increase in the initial three months of the year, marking a significant expansion following a prolonged period of stagnation, as reported by research firm Canalys.
However, Apple witnessed a decline of over 10% in quarterly iPhone sales compared to the previous year. Sales dwindled across all regions except Europe, with a notable 8% decrease in the critical greater China market.
CEO Tim Cook aimed to reassure investors regarding the situation in China, highlighting an increase in iPhone sales in “mainland” China.
Despite such efforts, competition is intensifying, particularly with local competitor Huawei staging a resurgence. Additionally, Apple is embroiled in legal disputes with regulators in both the US and Europe concerning its app store fees.
Furthermore, a separate anti-monopoly lawsuit against Google in the US threatens the substantial payments Apple receives as compensation for featuring Google as the default search engine on Safari, its internet browser.
Court documents reveal that these payments amounted to roughly $20 billion in 2022, significantly contributing to Apple’s profits.
Chief Financial Officer Luca Maestri projected a modest increase in Apple sales for the upcoming three months, particularly emphasizing the anticipation of double-digit growth in the services sector—an unusually detailed forecast for the company.
Following the earnings report, Angelo Zino, senior equity analyst at CFRA Research, suggested that these results could potentially alter the prevailing narrative surrounding Apple.
“China is holding up better than expected and there are a host of upcoming events/catalysts on the horizon that could improve investor sentiment,” he wrote.
