Despite falling sales in most countries in the first quarter of 2024, the world’s largest smartphone designer and manufacturer has maintained a positive outlook for the coming year.
On the Decline?
Some believe the world’s favorite smartphone manufacturer may be sitting on a shaky pedestal, as tech giant Apple revealed a significant drop in sales across the global marketplace. But the company disagrees.
Quarterly Earnings Call
On Thursday Apple shared its latest quarterly results, including a quarterly revenue of $90.8 billion, which showed that company revenue fell by 4% across the board in the first three months of 2024.
iPhone Sales Plummet
To make matters worse, iPhone sales dropped by more than 10% in the same period. It is the biggest drop in iPhone sales since the outset of the Covid-19 pandemic, i.e. the July-September period of 2020.
Fifth Quarter Fall
It marks a continual decrease in revenue for the fifth consecutive quarter since the beginning of 2023.
CEO Defends Recent Numbers
CEO Tim Cook pushed to assuage investor concerns, sharing that falling sales had been anticipated and were the result of Covid-related supply disruptions rather than flagging consumer interest.
Covid Complications
Apple’s market success at the beginning of 2023 was a result of the company rushing to meet pandemic shipping delays. The company was playing catch-up to unfulfilled demand, so a drop in revenue this quarter was expected.
$5 Billion Delays to Blame
$5 billion in delayed iPhone 14 sales were made during that three-month period. “If you remove that $5 billion from last year’s results, we would have grown this quarter on a year-over-year basis,” Cook told CNBC.
Exceeding Market Predictions
What’s more, Apple’s revenue and earnings per share – which came in at $1.53 per share – actually exceeded expert predictions, according to FactSet Research.
Good Omens for 2024?
Apple fully expects sales to grow in the next quarter, with Cook also announcing imminent product launches and further artificial intelligence investments. AI innovation is now seen as a requirement for major tech companies who want to keep up with consumer demand and industry competition.
Product Announcements
“During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks,” said Cook. “We’re also looking forward to an exciting product announcement next week and an incredible Worldwide Developers Conference next month.”
“Focused on Providing the Best”
“As always, we are focused on providing the very best products and services for our customers, and doing so while living up to the core values that drive us,” the CEO confirmed.
Shares Jump
Despite the sales decline and increasing pressure on the tech market, Apple has actually seen its shares climb to 7%, thanks to a $110 billion share buyback announcement.
Largest Buyback in Apple History
The buyback was recently authorized by the board, and is the largest buyback plan in the company’s history, according to data from stock market research and money management firm Birinyi Associates.
Quarterly Dividends Raised
Apple will also raise its quarterly dividends to $0.25 per share, signaling a considerable 4% increase.
Confident Moves
“Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional US$110 billion for share repurchases,” said Apple chief financial officer Luca Maestri. “We are also raising our quarterly dividend for the twelfth year in a row.”
China Troubles?
The company has also moved to reassure shareholders of the company’s status in China. Apple’s overall sales have dropped by 8% in the world’s second-largest economy.
“A Great View of China in the Long Term”
“I maintain a great view of China in the long term,” said Cook, who claimed that despite overall sales decline, iPhone sales specifically are up in “mainland” China.
Good Prospects in India
Sales are also looking up in India. The company broke records in the Indian marketplace, with Apple’s revenue increasing to $2 billion in the south-Asian country for the first quarter of 2024.
“An Incredibly Exciting Market”
“We did grow strong double-digit, and so we were very, very pleased with that,” Cook added during the earnings call. “As you know, as I’ve said before, I see it (India) as an incredibly exciting market and it’s a major focus for us.”
Legal Disputes Continue
While Apple leaders look to the future, their legal department is firmly grounded in the present as it continues to face off with US and EU regulators due to app-store fees. A US anti-monopoly lawsuit is also ongoing.
The post – Apple Faces Global Slump As iPhone Sales Down Sharply Since Pandemic – first appeared on Career Step Up.
Featured Image Credit: Shutterstock / Tada Images.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
