Apple earnings see 10% iPhone sales drop, massive buyback fuels stock jump | TechCrunch

apple thursday iPhone sales recorded a 10% decline In the second fiscal quarter, it fell to $45.96 billion from $51.33 billion year-on-year. The slowdown was fueled in part by an 8% decline in China.

Apple’s slow adoption of AI compared to competitors like Google and Microsoft likely played a role in consumers’ decision to hold off on purchasing the new iPhone. Apple has promised some big announcements on that front (likely at WWDC in June), but the iPhone 16 isn’t likely to arrive until the fall.

“Keep in mind as we explained on the last call in the March quarter a year ago, we are looking to replenish iPhone channel inventory and meet significant pent-up demand from COVID-related supply disruptions on the iPhone 14 Pro and 14 Pro in the December quarter. Were capable of. Max,” CEO Tim Cook explained on the earnings call. “We estimate this one-time impact to be $5 billion on revenues for the March quarter last year. If we take this out from last year’s results, our March quarter total company revenue would have increased this year.

However, despite those dire hardware figures, the company still managed to beat Wall Street’s expectations and the stock soared more than 6% After hours, growth in services revenue and a massive stock buyback of $110 billion — both a jump on last year’s $90 billion purchases.

Services, which includes offerings like iCloud, Apple TV+ and Apple Music, grew 14% this year. Apple has long feared a slowdown in hardware sales, and its increased focus on subscription services has helped offset some of that loss.

“We expect our services business to grow in double digits at a rate similar to the growth recorded in the first half of the financial year,” the CFO said. Luca Maestri heeded the call. “iPad should grow in double digits,” he said.

The company is expected to release two new iPads simultaneously Standalone event next week, There’s no doubt that the company hasn’t refreshed the tablet line since 2022, leading to a year-over-year decline in its sales from $6.67 billion to $5.56 billion. At Tuesday’s event, Apple is also expected to make an announcement with the M4 chip – the latest addition to the Apple silicon line. However, the company’s chip progress will soon be challenged by Microsoft’s efforts in this area, which are expected to be revealed at the Build conference in late May. There is also the possibility of more hardware for the annual World Wide Developers Conference in June.

Apple doesn’t break the Vision Pro numbers. Instead, those numbers are factored into wearables, home, and accessories — a list that also includes devices like the Apple Watch, AirPods, and HomePods. However, most reports point to worse sales than anticipated. The company nevertheless attempted to put a positive spin on the headset’s arrival.

“During the quarter, we were thrilled to launch Apple Vision Pro and show the world the possibilities of spatial computing,” Cook said. Mentioned in a release, “We also look forward to an exciting product announcement next week and an incredible worldwide developers conference next month.”

In February, Cook attempted to address concerns that the company was lagging behind Google and Microsoft, thing worth noting That it will have more information about its generative AI efforts “later this year.” While this topic will undoubtedly be top of mind at the iPad event, it seems the company is saving the big news for WWDC in June. Meanwhile, reports have emerged that Apple is going to integrate both OpenAI’s ChatGPIT and Google’s Gemini into future iPhones.

“Obviously, I don’t want to preempt our announcements,” Cook said in response to a question on the topic during tonight’s call. “I would just say that we see generative AI as a very important opportunity in our products. And we believe we have advantages that set us apart out there. And so, we’ll be talking more about that as we move forward in the coming weeks.”