Apple Ends Five-Quarter Sales Slump, Gears up for AI-Powered Phones

Apple’s latest quarterly results show a return to growth, with the company gearing up to launch new AI features expected to drive iPhone demand.

Breaking a sales slump: Apple’s fiscal third-quarter results reveal a 5% year-over-year increase in revenue, exceeding analysts’ projections and ending a streak of five consecutive quarters of sales declines.

• The company reported revenue of $85.78 billion for the April-June period, traditionally a slow quarter for Apple as customers await the next iPhone release.
• Apple’s profit also grew by 8% compared to the same period last year, reaching $21.45 billion, or $1.40 per share, surpassing analyst forecasts.

iPhone sales and the AI revolution: Although iPhone sales continued to decline, dipping 1% from last year to $39.3 billion, the upcoming integration of artificial intelligence features is expected to boost demand for the next iPhone model.

• Apple plans to introduce a range of AI tools in a free software update this autumn, including a smarter Siri virtual assistant and features that help draft texts and create unique emojis.
• Most of these AI features will only work on iPhones equipped with a special chip, which has so far been limited to two premium models released last year.
• The iPhone 16, set to launch later this year, is expected to include the AI chip, potentially spurring consumers with older devices to upgrade in order to access the new features.

Challenges in China: Apple’s sales in China, a key market for the company, continued to decline, with revenue dropping 7% from last year in the past quarter.

• The ongoing erosion of sales in China remains a concern for investors, given the region’s importance to Apple’s overall performance.

Looking ahead: As Apple prepares to embrace the artificial intelligence trend, the company’s forthcoming AI-powered features and the anticipated release of the iPhone 16 are expected to drive consumer demand and further strengthen its position in the market. However, the persistent sales challenges in China may continue to impact Apple’s overall growth trajectory in the near term.