Apple sells $46 billion worth of iPhones over the summer as AI helps end
slump
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[November 01, 2024] By
MICHAEL LIEDTKE
SAN FRANCISCO (AP) — Apple snapped out of a recent iPhone sales slump
during its summer quarter, an early sign that its recent efforts to
revive demand for its marquee product with an infusion of artificial
intelligence are paying off.
Sales of the iPhone totaled $46.22 billion for the July-September
period, a 6% increase from the same time last year, according to Apple’s
fiscal fourth-quarter report released Thursday. That improvement
reversed two consecutive year-over-year declines in the iPhone’s
quarterly sales.
The iPhone boost helped Apple deliver total quarterly revenue and profit
that exceeded the analyst projections that sway investors, excluding a
one-time charge of $10.2 billion to account for a recent European Union
court decision that lumped the Cupertino, California, company with a
huge bill for back taxes.
Apple earned $14.74 billion, or 97 cents per share, a 36% decrease from
the same time last year. If not for the one-time tax hit, Apple said it
would have earned $1.64 per share — topping the $1.60 per share
predicted by analysts, according to FactSet Research. Revenue rose 6%
from last year to $94.93 billion, about $400 million more than analysts
forecast.
But investors evidently were hoping for an even better quarter and
appeared disappointed by an Apple forecast that implied its revenue for
the October-December quarter covering the holiday shopping season might
not grow as robustly as analysts envisioned. Apple's stock price shed
about 2% in Thursday's extended trading, leaving the shares hovering
around $221 — well below their peak of about $237 reached in
mid-October.
The latest quarterly results captured the first few days that consumers
were able to buy a new iPhone 16 line-up that included four different
models designed to handle a variety of AI wizardry that the company is
marketing as “Apple Intelligence.” The branding is part of Apple’s
effort to distinguish its approach to AI from rivals such as Samsung and
Google that got a head start on bringing the technology to smartphones.
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People gather near a display of iPhone 16's at the Apple Store on
5th Ave. in New York on September 20, 2024.(AP Photo/Ted Shaffrey,
File)
Even though the iPhone 16 was
specifically built with AI in mind, the technology didn’t become
available until Apple released a free software update earlier this
week that activated its first batch of technological tricks,
including a feature designed to make its virtual assistant Siri
smarter, more versatile and more colorful. And those improvements
are only available in the U.S. for now.
“This is just the beginning of what we believe generative AI can
do,” Apple CEO Tim Cook told analysts during a Thursday conference
call.
Cook said plans to expand the AI iPhone features into other
countries in December, as well as roll out other software updates
that will inject even more of the technology in the iPhone 16 and
two high-end iPhone 15 models that are also equipped with the
special computer chips needed for the slick new features. The
December expansion will include an option to connect with OpenAI's
ChatGPT to take advantage of technology that Apple isn't making on
its own. More languages
Investors are betting that as Apple’s AI becomes more broadly
available, it will prompt the hundreds of millions of consumers who
are using older iPhones to upgrade to newer models in order to get
their hands on the latest technology.
“We believe it's a compelling upgrade reason,” Cook asserted. But
Investing.com analyst Thomas Monteiro believes iPhone sales would
already be accelerating at a faster pace if consumers were blown
away by Apple's AI technology, increasing the pressure on the
company “to do an overall better job to impress the public.”
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