A robust services business and the sales success of new laptop models make Apple optimistic. After five declines in sales in six quarters, the trough has been passed, said company boss Tim Cook. The electronics group is pinning its hopes on new functions with artificial intelligence (AI), which are expected to come onto the market in the coming months.
To underline the increased optimism, Apple announced that it would buy back additional shares worth $110 billion. This is the largest buyback program in the company’s history, said analyst Thomas Monteiro from online broker Investing.com. In addition, the dividend is to be increased by four percent. Apple shares then rose by seven percent in after-hours US trading.
At the start of the year they shrank Group sales by four percent to 90.8 billion US dollars. However, experts had expected an even more significant decline. For the current quarter, company boss Cook forecast a low single-digit percentage increase.
Apple is once again worried about the iPhone, which contributes half of the group’s revenue. It has to prove itself against the increased competition from Samsung and Huawei. Apple’s revenue from smartphone sales fell by more than ten percent to just under $46 billion, the highest since more than three years ago. However, sales have increased in the important and highly competitive Chinese market, emphasized Cook. Therefore, the decline in sales in the People’s Republic of 8.1 percent was also lower than feared.
The proceeds from the Service business, which includes the streaming service Apple TV+, grew surprisingly significantly to almost $24 billion. The feared decline in sales of Mac computers did not materialize. Instead, revenue rose to $7.5 billion. About half of those who bought a Macbook Air in the first quarter were “Mac newbies,” said company boss Cook. On the other hand, sales of tablets were disappointing, falling to around $5.6 billion. However, Apple has invited people to an event on May 7th that is expected to have one new iPad generation is presented.
Cook also announced the first new AI functions. His company is investing heavily in this area. According to a media report, Apple wants to use the technology of the ChatGPT developer OpenAI or the AI ”Gemini” from the Alphabet subsidiary Google. This could bring a surge in demand for the next generation of iPhones, predicted analyst Toni Sacconaghi from asset manager Bernstein. This also applies to China, where Apple recently lost market share to local competitors. Customers there often made their purchasing decisions dependent on new functions.