Apple reported better-than-expected earnings in the third quarter of 2024, despite a year-over-year decline in iPhone sales and a continuing trend of decline in its key China market.
Earnings exceeded analyst predictions, with revenue rising 4.9% year-over-year to $85.78bn in the three months ending 29 June, beating the average analyst estimate of $84.53bn, according to LSEG data. The company maintained its cash dividend at 25 cents for each share.
Investors were keen to get updates on Apple sales in China, the company’s third-largest market, where the company’s market share has been on the decline. Apple dropped out of the top five smartphone providers in the country for the first time earlier this year, overtaken by local brands like vivo, OPPO, and Huawei. Third quarter earnings results showed China sales declined 6.5% to $14.73bn – more dramatically than the decline of 2.4% analysts had predicted.
Although China sales still struggled, overall iPhone sales were better-than-expected – falling 0.9% to $39.30bn, a smaller decline than the 2.2% drop analysts expected. That improvement is due in part to rising demand in anticipation of Apple’s launch of its artificial intelligence features, which it announced at its annual developers conference WWDC in June.
The tech firm’s foray into artificial intelligence includes a range of generative AI tools integrated into the operating systems of its devices, including a partnership with OpenAI that integrates into its voice assistant Siri.
Still, those AI features will only be available iPhone 15 Pro models and later. Apple typically announces new devices in September, so analysts will be looking ahead to determine how the AI announcements impact future sales.
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