Apple’s sales have declined across nearly all global markets, as revealed by the latest figures from the tech giant.
The company reported a drop in demand for its smartphones by over 10% in the first quarter of this year, with sales decreasing in every geographic region except Europe.
Despite this decline, Apple’s revenue fell by 4% to $90.8 billion, marking the largest drop in over a year. However, the results were slightly better than anticipated, leading to a rise in Apple’s share price during after-hours trading in New York.
Apple attributed the figures partly to Covid-related supply disruptions, which resulted in unusually strong sales during the same period last year.
The company expressed confidence in a return to growth in the coming months, citing upcoming product launches and investments in artificial intelligence (AI).
Sales in the critical greater China market experienced an 8% decline. Apple’s CEO, Tim Cook, sought to reassure investors about the state of the business in China, noting that iPhone sales were up in mainland China.
“I maintain a great view of China in the long term,” Cook stated.
However, competition in the Chinese market has been intensifying, particularly from local rivals like Huawei. Despite this, analysts believe Apple’s brand reputation and product quality still give it an edge over competitors.
“While companies like Huawei may excel in China due to their local brand recognition, iPhone’s features, functionality, and prestige maintain an advantage,” said Gil Luria, senior software analyst at DA Davidson.
Apple’s struggles contrast with the broader smartphone market, which saw a 10% increase in shipments in the first quarter, according to research firm Canalys.
Analysts attribute Apple’s challenges partly to a lack of significant improvements in its handsets since the launch of the iPhone 12 almost four years ago, which introduced 5G connectivity.
Looking ahead, Apple faces legal battles with regulators in the US and Europe over its app store fees. Additionally, an anti-monopoly lawsuit against Google in the US threatens Apple’s revenue from its search engine deal with Google.
Despite these challenges, Apple announced a flat pre-tax profit of $28 billion for the quarter and set aside $110 billion to buy back shares. Finance chief Luca Maestri expects sales to rise in the low single digits in the next quarter, with double-digit growth anticipated in the services business.
Commenting on future prospects, Angelo Zino, senior equity analyst at CFRA Research, stated, “China is holding up better than expected, and there are a host of upcoming events/catalysts on the horizon that could improve investor sentiment.”
