Apple sales see boost from AI features after uneven third quarter

Aug 02, 2024 03:12 PM IST

Chief Executive Officer Tim Cook, speaking on a conference call Thursday to discuss third-quarter results, said that upcoming Apple Intelligence features will provide a fresh reason for customers to buy new phones. 

“It will be a very key time for a compelling upgrade cycle,” he told analysts on the call.

The remarks followed generally upbeat third-quarter results that were marred by sluggish sales in China. Apple returned to revenue growth in the period, which ended June 29, with an increase of 5% to $85.8 billion. That beat the $84.5 billion analyst estimate.

But sales from China fell 6.5% to $14.7 billion, missing the $15.3 billion projection from Wall Street.

Apple’s shares were virtually unchanged in premarket trading on Friday. They were down 0.1% at $218.10 at 4:56 a.m. New York time. The stock had gained 13% this year through the close, lifted by investors’ hope that new artificial intelligence technology would help boost sales.

The China results rekindled fears that Apple is losing ground in one of its most important overseas markets. The company is up against fiercer competition in the region, and the government has reined in the use of foreign technology in some workplaces. Chinese economic growth also has worsened. 

Apple attributed much of the decline to the impact of a strong dollar, saying that the underlying business in China is actually healthier than before. Three months ago, executives said the slowdown was less about an underperforming iPhone and more about weak sales of other products.

“We do realize it’s a very competitive smartphone market, but we feel we are doing quite well within the context of the broader economy,” Chief Financial Officer Luca Maestri told Bloomberg Television’s Emily Chang.

Cook said during the call that Apple still has faith in the market. “I don’t know how every chapter of the book reads, but we’re very confident in the long term,” he said.