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In the three months to the tip of June, Apple's revenue rose 5 percent, because of earnings from its services business and an increase in iPad sales, which offset a decline in iPhone sales and a continued slowdown in China.
Total net revenue rose to $85.8 billion through the period from $81.8 billion through the same period in 2023, beating analysts' expectations of $84.5 billion. Net income rose 8 percent to $21.4 billion from $19.9 billion, while earnings per share rose 11 percent year-over-year to $1.40 (the consensus estimate was $1.35). The company announced a dividend of 25 cents per share.
In after-hours trading, shares rose 1 percent.
One blemish on the quarter was one other drop in sales within the much-watched Greater China region, down 7 percent to $14.7 billion from $15.8 billion within the previous 12 months. The reason for that is ongoing competitive pressure from local cell phone manufacturers and a government ban on their use.
Apple's services business – which incorporates the App Store and Apple Pay – continued to achieve momentum, rising to $24.2 billion from $21.0 billion last 12 months. Although iPhone sales of $39.3 billion were barely below the previous 12 months's figure of $39.7 billion, this was offset by a 24 percent increase in iPad sales to $7.2 billion.
Analysts are optimistic concerning the prospect of a serious, multi-year global upgrade cycle for the iPhone, driven by a slew of recent AI features. With the iPhone 16 expected to launch in September, investors are watching closely to see how quickly the expected AI boost will materialize.
“We are also very happy that our installed base of lively devices has reached a brand new high across all geographic segments,” said Chief Financial Officer Luca Maestri.
Apple announced the brand new features, often called “Apple Intelligence,” at its developer conference in June, and this week a beta version of the brand new AI-powered iPhone operating system, iOS 18.1, was released to developers. A cope with OpenAI can even give Apple users free access to ChatGPT, and Apple has been exploring partnerships with other major AI model providers comparable to Google.
Last month, Apple's recent mixed reality headset, the Vision Pro, launched to consumers in Europe, China, Hong Kong, Singapore, Japan and Australia.
