Apple reported its second-quarter sales, which surpassed Wall Street’s expectations, indicating that the iPhone is performing better than anticipated in an industry that is experiencing a downturn. While revenue declined 2.5% to $94.8 billion compared to the same period last year, it was better than the $92.6 billion that analysts had predicted, and Apple itself had projected a 5% decline.
These results suggest that Apple is recovering from a slump that has been affecting both the computer and smartphone industries. Investors are particularly relieved after Qualcomm, one of Apple’s key suppliers, raised concerns about phone demand earlier in the week.
Apple’s iPhone revenue rose by 1.5%, which contrasts with the broader consumer electronics industry that is grappling with a decline in sales of smartphones, tablets, and PCs due to rising interest rates and economic uncertainty. However, Apple managed to gain market share against its Android rivals with a 13% decline in global smartphone shipments during the first three months of 2023.
Apple CEO Tim Cook told Reuters in an interview that the company set a fiscal second-quarter record for iPhone sales, partly due to gaining new users in emerging markets like India, where Apple recently opened its first retail stores.
While not all of Apple’s business lines were immune to the electronics slump, the company’s services business, which includes products such as iCloud and Apple Pay, grew 5.5% to $20.9 billion, in line with analyst expectations. Apple’s biggest growth segment was its services business, which now has 975 million subscribers on its platform, including both Apple services and third-party apps, up from 935 million last quarter and an increase of 150 million from a year ago.
Apple also announced plans to repurchase $90 billion in stock, the same as last year’s plan. Although Apple has announced new service businesses like a high-yield savings account, investors are still waiting for the company’s next major hardware product. Bloomberg has reported that Apple could unveil a mixed-reality headset as early as next month when it holds its annual software developer conference. Wall Street expects Apple to recover faster and shows modest year-over-year revenue growth during its fiscal third quarter ending in June.
