Apple’s latest earnings report surpassed expectations, despite a dip in iPhone sales globally. However, the strong performance of iPhones in China and robust sales in the services segment, including Apple TV+ subscriptions, offset the decline.
The company’s research and development spending reached $22.61 billion, largely driven by investments in generative artificial intelligence technology. Apple CEO Tim Cook highlighted that AI innovations would be incorporated into future product features, such as real-time voice mail transcription on iPhones. While facing competition in the smartphone market, Apple’s upcoming Vision Pro mixed-reality headset remains highly anticipated.
Apple’s sales in the greater China region rose to $15.76 billion from last year’s $14.60 billion in the same quarter, driven by a record number of iPhone switchers and strong upgrader activity.
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The company also achieved new quarterly records in China for wearables, home, accessories, and services. Despite iPhone sales slightly missing analyst expectations at $39.67 billion, the installed base of iPhones reached a new high. Apple’s services segment performed exceptionally well with $21.21 billion in revenue, supported by 1 billion subscribers on its platform.
The wearables business, which includes Apple Watch and AirPods, recorded revenue of $8.28 billion. Mac and iPad sales were also strong, with Mac buyers showing significant interest in Apple Silicon upgrades. The company continues to face challenges in the smartphone market but anticipates future growth through its Vision Pro and AI-related advancements.
