Apple experienced a decline in revenue for the fifth time in six quarters, primarily due to lower iPhone sales and increased competition in China's smartphone market. Despite this, Apple's shares rose over 7% in after-market trading as the company announced a $110 billion stock buyback and indicated potential revenue growth in the current quarter. While sales and profits dipped in the March quarter, they exceeded analyst expectations.
The company's main challenge lies with its iPhone, which has experienced sluggish growth. Although the company has seen success with its more expensive "Pro" phones, such as the iPhone 15 Pro Max priced at $1,200, this strategy hasn't significantly boosted overall revenue as before.
Samsung reclaimed the top spot for worldwide smartphone market share in the first quarter of the year, with Apple's iPhone shipments dropping nearly 10% annually. Despite this, Apple briefly held the top position in late 2023.
In China, Apple faced a tough market as Huawei's smartphone sales surged by almost 70% while Apple's fell by 19%. The Chinese government's bans on iPhones for officials also contributed to the challenging conditions.
Apple's revenue in Greater China declined by 8% to $16.4 billion, but CEO Tim Cook claimed that iPhone sales grew in mainland China. The company expects low single-digit sales growth in the April-to-June quarter.
Antitrust scrutiny in the U.S. and Europe has intensified, with lawsuits and investigations challenging Apple's market dominance. The company's new device, the Vision Pro, is not expected to significantly impact sales in the near future. However, Apple is investing heavily in generative AI technology and is exploring partnerships with Google and OpenAI.
Overall, investors are hopeful that AI innovations and potential iPhone updates, such as the rumored iPhone 16, will reignite excitement and boost sales following a lackluster performance with the iPhone 15.