Apple Q1 Earnings: iPhone Sales Dip, AI Rollout Slows China Growth
Apple exceeded quarterly profit expectations but fell short on iPhone revenue and China sales for the holiday quarter.
Key Findings:
* Total sales: $124.30 billion, beating estimates of $124.12 billion
* EPS: $2.40, surpassing consensus forecast of $2.35
* iPhone sales: $69.14 billion, below analyst expectations of $71.03 billion
* Greater China sales: $18.51 billion, declining from $20.82 billion last year
Factors Impacting Results:
* Weak iPhone sales: Competition from Chinese brands and delayed rollout of AI features contributed to a decline in iPhone revenue.
* Slow AI rollout: Apple Intelligence features are still gradually being released and are not yet available in China, hindering iPhone sales in the region.
* Stronger sales: iPad and Mac sales exceeded expectations, driven by new chips and persuasive customer incentives.
Management Outlook:
CEO Tim Cook attributed the year-over-year growth in iPhone 16 sales to Apple Intelligence. However, he provided no timeline for its availability in China due to regulatory challenges. Cook also noted inventory adjustments in China as a factor in declining revenue.
Analysts' Perspectives:
Analysts highlight the potential benefits of Apple Intelligence in driving future iPhone sales in China. The company's services business and ecosystem expansion are also providing momentum amidst the iPhone struggles. However, concerns remain over the cautious AI rollout and market competition in China.