Apple slightly surpassed analysts' expectations in the past quarter with revenue of $124.3 billion and a net profit of $36.3 billion. Revenue was up four percent from the previous year, while profit increased by seven percent. However, iPhone sales fell short of forecasts of $71 billion, coming in at $69.1 billion.
The Chinese market was particularly challenging: Revenue there fell by eleven percent to $18.5 billion. Apple is under strong pressure in the region from local competitors like Huawei and Xiaomi. Despite these losses, the company expects revenue growth in the low to mid-single-digit percentage range for the current quarter, even though exchange rate developments could weigh on revenue by 2.5 percentage points.
One hope remains the gradual introduction of Apple Intelligence, the new AI feature developed with OpenAI. Initial market analyses suggest that the iPhone 16 sells better in regions with Apple Intelligence than in markets where the features are not yet available. CFO Kevan Parekh expressed to the Financial Times that he is "incredibly optimistic" about the long-term impact of the AI technology. More language versions are to follow from April.
Apple's service division, which includes the App Store, iCloud, and Apple Pay, set a new revenue record with $26.3 billion. The business with iPads and MacBooks also recorded double-digit growth rates.
However, the company remains confronted with geopolitical risks. US President Donald Trump announced new tariffs on Taiwanese semiconductors this week—a potential problem for Apple's heavily Asia-dependent supply chain. Parekh emphasized that Apple is closely monitoring developments but did not want to comment further on possible impacts.
While tech stocks recently showed volatility, Apple remained stable. The stock gained three percent in after-hours trading, thereby defending the company's position as the world's most valuable company with a market capitalization of $3.6 trillion. Following Nvidia's share price crash due to DeepSeek's Chinese AI breakthrough, Apple remains unchallenged at the top for now.
