Apple’s profits for the third quarter of 2024 surpassed expectations, driven by new AI capabilities that helped offset declines in the Chinese market.
Although iPhone sales dropped compared to the previous year, revenue exceeded analyst predictions, reaching $85.78 billion for the quarter ending June 29, beating the expected $84.53 billion. The company maintained its cash dividend at 25 cents per share.
The positive report contrasted with disappointing earnings from tech giants like Amazon, Snap, and Intel. Intel, in particular, revealed plans to cut over 15,000 jobs to reduce costs and Amazon’s shares dropped after forecasting lower sales for the current and upcoming quarters.
Investors were keen on Apple’s performance in China, where market share has been dwindling. Sales in China dropped by 6.5% to $14.73 billion, a steeper decline than anticipated.
Apple’s CEO, Tim Cook, addressed the concerns during an investor call, attributing some of the decline to currency fluctuations and noting that iPad sales had returned to growth.
Despite challenges in China, iPhone sales exceeded expectations with a slight decrease of 0.9% to $39.3 billion, less than analysts had predicted. This improvement was partly due to heightened demand before the release of new iPhones that featured enhanced artificial intelligence capabilities.
Apple’s artificial intelligence initiatives, including generative AI tools and a partnership with OpenAI for Siri enhancements, are seen as a strong move towards the AI consumer market.
The company’s solid performance was lauded by analysts, with expectations high for future sales impacted by the AI upgrades.
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iPad sales experienced robust growth, increasing by 23.7% to $7.16 billion, surpassing analysts’ expectations. Meanwhile, revenue from wearables, which include Apple Watch and AirPods, decreased by 2.3% to $8.1 billion.
Courtesy of Reuters report
Source: www.theguardian.com
