- Apple's iPhone sales fell over 10% globally in Q1 2024, except for Europe.
- Apple pins future growth on AI features in upcoming iPhone 16.
- iPhone sales dropped in Greater China, but CEO assures growth in mainland China.
- Despite Apple's struggles, global smartphone shipments rose 10% in Q1.
Apple witnessed a drop of over 10% in iPhone demand during the first quarter of 2024. This slump affected nearly all regions except Europe. The company’s overall revenue also dipped by 4% to $90.8 billion, representing the steepest decline in over a year.
Despite the slump, Apple’s performance wasn’t as bad as analysts initially anticipated. This positive reception led to a rise in the company’s share price after trading hours.
Apple attributed the sales decline partly to disruptions in the supply chain caused by the COVID-19 pandemic. These disruptions resulted in unusually high sales during the same period in 2023. The company remains confident of a sales resurgence in the coming months, citing upcoming product launches and strategic investments in artificial intelligence (AI).
The critical Greater China market, particularly significant for Apple, saw an 8% decline in iPhone sales. However, CEO Tim Cook aimed to reassure investors regarding China’s market health. He highlighted that sales actually grew in mainland China, specifically. This growth comes amidst intensifying competition from local giants like Huawei, which capitalize on being a “homegrown brand” according to analyst Gil Luria.
Despite the competition, Luria acknowledges that iPhones retain an advantage in terms of features, functionality, and prestige. He suggests that whenever consumers have the resources and choice, they opt for iPhones, including those in China.
Apple’s recent struggles, marked by a string of declining sales in five out of the past six quarters, stand out against the positive trend in the broader market. According to Canalys, a research firm, global smartphone shipments witnessed a 10% increase in the first quarter, signifying a turnaround after a prolonged period of sluggish growth.
Luria points out that Apple hasn’t introduced any major improvements to the iPhone since the iPhone 12, launched nearly four years ago. Back then, the introduction of 5G connectivity significantly motivated consumers to upgrade their phones.
Looking ahead, Apple hopes to reignite a substantial iPhone upgrade cycle by integrating innovative AI features into the upcoming iPhone 16 later this year.
