Apple experiences its biggest drop in sales in a year.

Apple experiences After reporting its largest sales drop in more than a year, Apple CEO Tim Cook attempted to assuage concerns about the company’s future prospects.

Apple experiences

Sales fell 4% year on year in the first three months of 2024 to $90.8 billion (£72.5 billion), dragged down by a sharp drop in demand for iPhones.

Executives claimed the results were distorted by Covid-related supply disruptions, which resulted in unusually high sales during the same period last year.

They predicted that sales would return to growth in the coming months, citing upcoming product launches and investments in artificial intelligence.

“I couldn’t be more excited in the future we have ahead of us,” Cook said.

In a vote of confidence in the company’s future, it announced that it would set aside an unprecedented $110 billion to buy back shares.

In after-hours trading, the news boosted demand for the stock, which has dropped more than 6% this year.

However, the company’s struggles, which included a streak of sales declines in five of the last six quarters, stood out from the overall market.

Smartphone shipments increased 10% globally in the first three months of the year, following a long period of stagnation, according to research firm Canalys.

Apple’s quarterly iPhone sales dropped by more than 10% year on year.

Mr Cook sought to reassure investors about the state of the business in China, pointing out that iPhone sales were actually increasing in “mainland” China.

“I maintain a great view of China in the long term,” he told reporters.

However, competition is increasing as local rival Huawei makes a comeback.

Apple is also facing legal challenges from regulators in the United States and Europe over app store fees.

A separate anti-monopoly lawsuit filed in the United States against Google threatens Apple’s lucrative payments in exchange for making Google the default search engine on Safari, the company’s internet browser.

Apple experiences its biggest drop in sales in a year.

According to court filings, those payments totaled around $20 billion (£15 billion) in 2022, which helped boost Apple’s profits.

Luca Maestri, Apple’s chief financial officer, predicted that sales would rise in the “low single digits” in the three months leading up to June. He stated that the firm expected double-digit growth in its services business, providing more guidance than the company typically does.

Angelo Zino, senior equity analyst at CFRA Research, wrote in a research note following the results that they could “change the narrative” for Apple.

“China is holding up better than expected and there are a host of upcoming events/catalysts on the horizon that could improve investor sentiment,” he wrote in his post.

Article Source bbc.new

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