Apple on Thursday disclosed its steepest quarterly decline in iPhone sales since the pandemic’s outset, deepening a slump that’s increasing the pressure on the trendsetting company to spruce up its products with more artificial intelligence.
The 10% drop in year-over-year iPhone sales for the January-March period is latest sign of weakness in a product that generates most of Apple’s revenue. It marked the biggest drop in iPhone sales since July-September period in 2020, when production bottlenecks caused by factory closures during the pandemic resulted in a delayed release of that year's model.
The current iPhone downturn was the main reason Apple’s revenue for the latest quarter decreased 4% from last year to $90.8 billion. It marked the fifth consecutive quarter that Apple’s revenue dipped from the previous year. Apple’s profit in the past quarter totaled $23.64 billion, or $1.53 per share, a 2% dip from last year.
But both Apple's revenue and earnings per share came in slightly above analysts projections, according to FactSet Research. Apple also predicted its revenue for the April-June quarter will rise modestly from a year ago, which would end the recent streak of erosion.
Part of the iPhone deterioration during the first three months of the year stemmed from a big boost in sales during the same period last year when Apple said it was filling pent-up demand caused by pandemic-driven shipment delays.
Even as it stumbles slightly, Apple remains one of the world’s most prosperous companies. The Cupertino, California, company hammered home that point by announcing a 4% increase in its quarterly dividend to 25 cents per share. The company also committed to spending $110 billion buying back its own stock, a move that investors cheered but may fuel criticism that Apple is spending more money catering to Wall Street than creating more innovative products.
Bolstered by the increased dividend and stock repurchase commitment, Apple's shares rose nearly 7% in extended trading after the news came out. The stock price has fallen 10% so far this year, erasing about $300 billion in stockholder wealth.
Although investors have been dismayed by the weakening iPhone sales, they are also concerned Apple may be losing its edge as other tech giants such as Microsoft and Google sprint out to the early lead in artificial intelligence technology that is expected to reshape the industry and technology.
The latest quarterly report “leaves no margin for doubt about Apple’s current state of affairs,” said Investing.com analyst Thomas Monteiro. “More than ever in the past decade, the company needs new products and solutions.”
Apple is widely expected to unveil more AI services in June during an annual conference showcasing the next version of its software for the iPhone and Mac computers.
“We believe in the transformative power and promise of AI and we believe we have advantages that will differentiate us in this new era,” Apple CEO Tim Cook assured analysts during a Thursday conference while promising more details will be announced soon.
Weak sales in China were again a factor in the latest quarter, with revenue in that region falling 8% from last year to $16.37 billion as rival smartphone makers gained ground in one of the company’s largest markets. Even so, analysts had been anticipating an even bigger sales decline in the results, providing investors with a measure of relief.
Apple had a few bright spots in the past quarter too, most notably in its service division, which saw its revenue rise 14% from the year before to $23.87 billion.
The division reaps a significant portion of its revenue from a lucrative deal that locks in Google as the search engine that automatically answers queries on the iPhone — an arrangement that is a focal point of an antitrust trial currently wrapping up with closing arguments in Washington this week.
Commissions collected on digital transactions within iPhone apps are also a major revenue source within Apple’s services division, an area being targeted in a U.S. Justice Department lawsuit alleging the company is running an illegal monopoly that locks out competition to the detriment of consumers.
That case is expected to take several years to resolve, but European regulators already are forcing Apple to allow more alternatives to its proprietary iPhone app store as part of the Digital Markets Act.
FILE - In this June 16, 2020 file photo, the sun is reflected on Apple's Fifth Avenue store in New York. Apple will reports earnings on Thursday May 2, 2024. (AP Photo/Mark Lennihan, File)
THE HAGUE, Netherlands (AP) — Israel told the United Nations’ top court on Friday that a case brought by South Africa about its military operation in Gaza “makes a mockery of the heinous charge of genocide.”
The International Court of Justice is holding a third round of hearings on emergency measures requested by South Africa, which wants the court, based in The Hague in the Netherlands, to order a cease-fire in the enclave.
The allegations were “completely divorced from the facts and circumstances,” Israel’s deputy attorney general Gilad Noam told a panel of 15 international judges.
South Africa told the court on Thursday that the situation in Gaza has reached “a new and horrific stage” and urged judges to order Israel to halt its military operations. Israel must “totally and unconditionally withdraw” from the Gaza Strip, said Vusimuzi Madonsela, South Africa’s ambassador to the Netherlands.
Israel has strongly denied committing genocide in Gaza, saying it does all it can to spare civilians and is only targeting Hamas militants.
“We do not wish harm to these civilians as Hamas does,” Noam said, accusing the organization of using human shields.
South Africa has submitted four requests for the ICJ to investigate Israel. According to the latest request, the country says Israel's military incursion in Rafah threatens the “very survival of Palestinians in Gaza.”
In January, judges ordered Israel to do all it can to prevent death, destruction and any acts of genocide in Gaza, but the panel stopped short of ordering an end to the military offensive.
The court has already found that there is a “real and imminent risk” to the Palestinian people in Gaza by Israel’s military operations.
ICJ judges have broad powers to order a cease-fire and other measures, though the court doesn't have its own enforcement apparatus. A 2022 order by the court demanding that Russia halt its full-scale invasion of Ukraine has so far gone unheeded.
Most of Gaza’s population of 2.3 million people have been displaced since fighting began.
The war began with a Hamas attack on southern Israel on Oct. 7 in which Palestinian militants killed around 1,200 people and took about 250 hostages. More than 35,000 Palestinians have been killed in the war, Gaza’s Health Ministry says, without distinguishing between civilians and combatants in its count.
South Africa initiated proceedings in December 2023 and sees the legal campaign as rooted in issues central to its identity. Its governing party, the African National Congress, has long compared Israel’s policies in Gaza and the occupied West Bank to its own history under the apartheid regime of white minority rule, which restricted most Blacks to “homelands.” Apartheid ended in 1994.
Follow AP's coverage at https://apnews.com/hub/israel-hamas-war
Israel's agents Gilad Naom, left, Tamar Kaplan Tourgeman, center, and co-agent Avigail Frisch Ben Avraham, right, wait for the start of hearings at the International Court of Justice, in The Hague, Netherlands, Thursday, May 16, 2024. The U.N.'s top court opened two days of hearings in a case brought by South Africa to see whether Israel needs to take additional measures to alleviate the suffering in war-ravaged Gaza. (AP Photo/Peter Dejong)
The Peace Palace office of the International Court of Justice, or World Court, is pictured through a fence in The Hague, Netherlands, Thursday, May 16, 2024. The U.N.'s top court opened two days of hearings in a case brought by South Africa to see whether Israel needs to take additional measures to alleviate the suffering in war-ravaged Gaza. (AP Photo/Peter Dejong)
The Peace Palace, office of the International Court of Justice, or World Court, is pictured through a fence in The Hague, Netherlands, Thursday, May 16, 2024. The U.N.'s top court opened two days of hearings in a case brought by South Africa to see whether Israel needs to take additional measures to alleviate the suffering in war-ravaged Gaza. (AP Photo/Peter Dejong)
Judges enter the International Court of Justice, in The Hague, Netherlands, Thursday, May 16, 2024. The U.N.'s top court opened two days of hearings in a case brought by South Africa to see whether Israel needs to take additional measures to alleviate the suffering in war-ravaged Gaza. (AP Photo/Peter Dejong)
Front row from left, South Africa's agents Cornelius Scholtz, Vusimuzi Madonsela and Israel's agents Gilad Naom, Tamar Kaplan Tourgeman and co-agent Avigail Frisch Ben Avraham wait for the start of hearings at the International Court of Justice, in The Hague, Netherlands, Thursday, May 16, 2024. The U.N.'s top court opened two days of hearings in a case brought by South Africa to see whether Israel needs to take additional measures to alleviate the suffering in war-ravaged Gaza. (AP Photo/Peter Dejong)
