Apple on Thursday posted its sharpest quarterly decline since the end of the novel coronavirus pandemic, exacerbating a slump that is adding to pressure to make its products more desirable with artificial intelligence (AI).
The 10% year-on-year drop in iPhone sales in the first quarter of the year is the latest sign of weakness in a product that generates most of Apple’s revenue.
The drop announced today was the strongest in iPhone sales since the July-September quarter of 2020, when production bottlenecks caused by factory closures during the pandemic led to the presentation of this year’s model being postponed.
This drop in iPhone sales was the main reason for the four percent year-on-year drop in Apple’s quarterly sales, to 90.8 billion dollars. This was the fifth consecutive quarter in which Apple’s sales fell year-on-year. Likewise, year-on-year results also fell, albeit by two percent, to 23.64 billion dollars. But both sales and results came in above analysts’ forecasts, according to FactSet Research.
Part of the iPhone’s deterioration during the first quarter of the year stems from the sharp increase seen in the same period a year earlier, when Apple said it was meeting demand that was on hold due to transportation postponements resulting from the state of the pandemic. Even with this drop, Apple remains one of the most profitable companies in the world.
Based in Cupertino, California, the company announced a four percent increase in its dividend, to 25 cents, as well as announcing 110 billion dollars to buy back its own shares.
In addition to the drop in iPhone sales, investors are also worried about what they see as a loss of focus by the company, as other conglomerates such as Microsoft and Google step up their bets on AI technology, which is expected to reformat the industry and technology.
The latest quarterly report “leaves no room for doubt about Apple’s current state,” said Thomas Monteiro, an analyst at Investing.com. “More than ever in the past decade, the company needs new products and new solutions,” he said.