(San Francisco) Apple achieved revenue of $90.75 billion in the first three months of the year, including $23.6 billion in net profit, both down year-on-year, but less than feared the market.
In its earnings release published Thursday, the iPhone maker also announced an unprecedented $110 billion share buyback program.
The board of directors authorized it “given our confidence in the future of Apple,” said Luca Maestri, the financial director of the Californian group, quoted in the press release.
“Thanks to customer satisfaction and loyalty, our active device fleet has reached a new all-time high across all products and geographies,” he added.
The market appreciated this announcement, in the absence of the usual flamboyant results from the Apple brand: Apple’s stock rose more than 6% during electronic trading after the close of the New York Stock Exchange.
Sales of its flagship product, the iPhone, generated less than $46 billion in revenue in the second quarter of its staggered fiscal year, down 10% year-on-year.
“Lower demand for the iPhone in China has significantly reduced revenues,” noted Emarketer analyst Jacob Bourne.
Services at the top
Apple had overtaken Samsung in 2023 in smartphone sales, but the Californian once again ceded the throne to the South Korean in the first quarter of 2024, according to the specialized research firm IDC, while the Chinese brands Xiaomi and Transsion recorded strong growth, in a context of recovery in this market.
Services activity, on the other hand, recorded “a historic record”, according to Tim Cook, Apple’s boss.
The services, which include the App Store application store, music and video streaming platforms (Apple TV+), as well as remote data storage (cloud), achieved a turnover of almost 24 billion dollars
This segment now represents more than 26% of the company’s revenues.
“In the long term, I think Apple’s evolution toward a services-based business model is a solid approach to offsetting its reliance on iPhone sales,” said Forrester analyst Thomas Husson.
“From a business perspective, it is clear that neither the new products launched in the first quarter [par exemple le casque Vision Pro et le nouveau MacBook Air] nor the expected refresh of other device ranges such as tablets and pens will impact the company’s results in the near future,” he added.
And AI?
Apple’s results come after those of its neighbors and sometimes competitors, from Google and Meta in Silicon Valley to Microsoft and Amazon in Seattle.
All these major technology groups made profits above expectations, but the analysts above all wanted to know if their massive investments in generative artificial intelligence (AI) (production of content on a simple query in everyday language) are yielding profits, or will bring some back soon.
“Apple’s determination to stay away from the AI hype is likely to crumble as the company begins to become quite isolated,” said Forrester’s Dipanjan Chatterjee. “It is possible that she will make announcements on this subject soon.”
In particular, the market expects that Apple’s next developer conference in June will focus on new generative AI tools integrated into the iPhone.
The apple brand had a start to the year marked by layoffs, legal proceedings and controversies.
It fired more than 600 people at the end of March, according to data published by a California state agency. The total scope of the social plan could be larger, with Apple only being forced to report California layoffs.
Also in March, the American government took Apple to court for monopolistic practices linked to the iPhone and the constraints imposed by the group on application developers.