Apple announced on Thursday that its third-quarter financial results surpassed Wall Street expectations with a 5% increase in overall revenue. The iPad category showed significant growth, jumping from $5.8 billion to $7.2 billion year-over-year, thanks to a successful line refresh. However, iPhone revenue saw a slight decrease from $39.7 billion to $39.3 billion year on year.
Despite the decline, iPhone remains Apple’s top-selling category, followed by services, which includes iCloud, Apple TV+, and Apple Music. The services category saw growth, reaching $24.2 billion from $21.2 billion compared to the same period last year.
The decline in iPhone sales can be attributed to the Greater China region, which saw a decrease from $15.8 billion to $14.7 billion for the quarter. Recent Canalys reports indicate a 6.7% drop in iPhone sales in China, highlighting increased competition from domestic brands.
To counter this, Apple began offering discounts on iPhones in China, resulting in a substantial increase in sales. Huawei, after facing setbacks from U.S. sanctions, experienced a resurgence in China due to in-house chip production and an Android alternative.
Huawei’s sales surpassed Apple’s in China by 10.6 million units for the quarter, with a 41% year-over-year growth according to Canalys data. This decline in iPhone sales globally marks the second consecutive quarter, putting pressure on Apple’s generative AI strategy unveiled at WWDC in June.
During an interview with CNBC, CEO Tim Cook mentioned the company’s focus on expanding Apple Intelligence, reallocating resources to AI development. This shift came after resources were redirected from the autonomous electric car project, Project Titan.
