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The tech giant Apple has revealed a concerning dip in iPhone sales during its first quarter, primarily attributed to weakening demand in the Chinese market. Despite the introduction of artificial intelligence features, iPhone revenue declined by 0.8 per cent to $69.1 billion in the December quarter.
The company’s overall financial performance showed resilience, with total revenue climbing 3.9 per cent to $124.3 billion, meeting market expectations. Net income demonstrated stronger growth, rising 7.1 per cent to $36.3 billion, surpassing analyst forecasts of $35.6 billion. The positive results prompted a 3 per cent increase in share price during after-hours trading, reaching $244.75.
The Chinese market proved particularly challenging, with regional revenue falling 11.1 per cent to $18.5 billion. Tim Cook, Apple’s chief executive, attributed approximately half of this decline to inventory adjustments among local resellers. The company’s AI rollout strategy has faced scrutiny, particularly regarding the absence of a local partner in China for feature deployment.
Bright spots emerged in other segments, with iPad sales surging 15.2 per cent to $8.1 billion and Macbook revenue increasing 15.5 per cent to $9 billion. The services division, encompassing the App Store, Apple Music, and Apple TV, demonstrated robust growth with a 14 per cent revenue increase to $26.3 billion.
The company’s AI initiative, branded as Apple Intelligence, has shown promising results in markets where it has been implemented. Cook emphasised that regions with access to Apple Intelligence demonstrated stronger year-over-year performance for the iPhone 16 family compared to markets without these features.
The tech sector has experienced volatility following claims from Chinese AI start-up DeepSeek about developing a cost-effective chatbot, raising questions about the substantial AI infrastructure investments made by US companies.
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