Apple reported a strong quarter despite a decline in iPhone sales compared to the previous year. New features with artificial intelligence are boosting iPhone sales, according to Apple. In countries where Apple Intelligence is already available, the new iPhone 16 has sold better, said CEO Tim Cook after presenting fresh quarterly figures. Additionally, there was a record number of users who replaced their old iPhones with new ones.
Apple closed the traditionally lucrative Christmas quarter with a decline in the iPhone business. However, growth in Mac computers, iPads, and services pushed the company’s revenue to a record high. Apple customers now use 2.35 billion different devices from the company.
Cook’s comments on the effect of Apple Intelligence also made the stock market more optimistic. Apple shares turned from a loss to a gain of about three percent in after-hours trading. Apple had previously launched the AI features only in the USA, Canada, Australia, New Zealand, South Africa, and the UK. More countries, including Germany, are to follow in April.
Apple Intelligence features include software that creates summaries of emails or text messages and improves texts. Users can also generate their own emojis with text prompts and remove unwanted objects in photos. Google, as the developer of the rival Android smartphone system, and manufacturers like Samsung are also offering more AI features in their devices.
The iPhone remains by far the most important product. But the past quarter demonstrated how the company benefits from a broad offering with various device categories. iPhone sales fell from $69.7 billion in the previous year’s quarter to $69.14 billion. Analysts had expected around $71 billion on average.
The Mac business performed significantly better than Wall Street expected. Revenue rose from $7.8 billion to $8.99 billion. Analysts had expected just under $8 billion. There was also a significant increase in iPad sales from $7 billion to over $8 billion. The services business, which includes revenue from the App Store and Apple’s subscription offerings, grew from $23.1 billion a year ago to $26.34 billion.
Overall, the company’s revenue increased by four percent to a record $124.3 billion. In the end, Apple increased its quarterly profit by seven percent to $36.3 billion.
An initial drop in the stock price could have been caused by the decline in iPhone sales and a slowdown in business in the China region. Revenue there fell by eleven percent to $18.5 billion, missing analysts’ expectations. Apple faces more competition from Chinese smartphone providers in this large market. However, Cook said in a conference call with analysts that Apple hopes for a boost from economic measures in China.