Despite new AI features, iPhone sales dipped in 2024

Apple’s iPhone sales declined slightly in late 2024 despite the introduction of new AI features, with overall sales dropping approximately 1% to $69.1bn compared to the previous year.

Market Performance and Key Numbers: Apple reported mixed results in its latest earnings report, with total company sales rising 4% to $124.3bn while iPhone revenue specifically decreased.

• Overall company profits increased 7% year-over-year to $36.3bn
• Strong performance in computer sales and services business, including Apple TV, Apple News, and Apple Pay, helped offset iPhone weakness
• A record number of existing iPhone users upgraded their devices during the period

AI Implementation and Challenges: Apple’s gradual rollout of artificial intelligence features has faced both technical and geographical limitations.

• Initial AI features were only available in select markets, including the United States
• The company plans to expand AI capabilities to more languages in April 2024
• A recent controversy emerged when AI news roundup alerts produced inaccurate summaries of headlines, leading to the feature’s suspension

Global Market Dynamics: The company faces several external challenges that could impact future performance.

• Sales declined in the crucial Chinese market
• Potential U.S. tariffs of up to 60% on Chinese-made products could affect Apple’s business model
• CEO Tim Cook acknowledged the company is closely monitoring the tariff situation

Expert Analysis: Analysts suggest Apple needs to accelerate its AI strategy while maintaining product quality.

• Emarketer analyst Jacob Bourne emphasized the need for Apple to speed up its AI feature rollout
• The company must balance its traditionally cautious approach with market demands for AI innovation
• Current results demonstrate continued execution ability, but upcoming quarters will be crucial

Future Outlook: Apple faces a delicate balancing act between maintaining its premium market position and responding to competitive pressures in AI innovation, while navigating geopolitical challenges that could significantly impact its manufacturing strategy and profit margins.