Apple Inc said it predicts that its new artificial intelligence (AI) features would spur iPhone upgrades in coming months, helping the company re-emerge from a sales slowdown that has hit its China business especially hard.
Apple Intelligence features would provide a fresh reason to buy new phones, Apple CEO Tim Cook said during an investors’ conference call on Thursday.
“It will be a very key time for a compelling upgrade cycle,” he said.
Photo: Bloomberg
The remarks followed generally upbeat third-quarter results that were marred by sluggish sales in China. Apple returned to revenue growth in the period, which ended June 29, with an increase of 5 percent to US$85.8 billion. That beat the US$84.5 billion analyst estimate.
However, sales from China fell 6.5 percent to US$14.7 billion, missing the US$15.3 billion projection from Wall Street.
The China results rekindled fears that Apple is losing ground in one of its most important overseas markets. The company is up against fiercer competition in the region, and the government has reined in the use of foreign technology in some workplaces. Chinese economic growth also has worsened.
Apple attributed much of the decline to the impact of a strong US dollar, saying that the underlying business in China is actually healthier than before.
“We do realize it’s a very competitive smartphone market, but we feel we are doing quite well within the context of the broader economy,” Apple chief financial officer Luca Maestri told Bloomberg Television, adding that Apple still has faith in the market.
“I don’t know how every chapter of the book reads, but we’re very confident in the long term,” he said.
Apple said that total sales in the September quarter would grow at a similar level as the just-ended period, implying an increase of about 5 percent. Wall Street has projected a 4 percent clip.
Services would be a highlight in the period, advancing in the double digits, executives said.
Earnings amounted to US$1.40 per share in the third quarter, exceeding the US$1.35 analysts had estimated. The period ending in June is typically one of Apple’s slowest, coming at a time when many customers are waiting for the next iPhone to arrive in the fall.
Sales of the iPhone, came in at US$39.3 billion. Although the number was down slightly from a year earlier, it edged past Wall Street expectations. Three months ago, the company declined to forecast iPhone revenue for the June period — a signal it was still unsure about the shaky smartphone market.
Its iPad business benefited from the long-awaited release of new models. Apple introduced major upgrades in May after a sluggish stretch for the tablet lineup.
The new products included a pricier iPad Pro with an M4 chip and faster version of the iPad Air with a bigger screen option.
The company reported US$7.16 billion in revenue from the category, up 24 percent, beating the US$6.6 billion estimate.
Apple previously said it expected the iPad to grow by a percentage in the double digits during the June period — something it easily accomplished. For several months, some customers and schools had been holding out on iPad purchases in expectation of the new models.
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