Apple has reported a decline in sales across nearly all of its global markets, citing a drop in demand for its smartphones and disruptions in supply chains due to the ongoing pandemic. The tech giant revealed that sales of its smartphones fell by over 10% in the first quarter of this year, contributing to an overall revenue decline of 4% to $90.8 billion. Despite this, the results were not as bleak as anticipated, leading to a rise in Apple’s share price in after-hours trading.
The company attributed the decline in sales to Covid-related supply disruptions, which had led to unusually strong sales during the same period last year. Apple expressed optimism for future growth, citing upcoming product launches and investments in artificial intelligence (AI).
While overall sales in China, a critical market for Apple, dropped by 8%, CEO Tim Cook highlighted that iPhone sales were actually up in mainland China. He reassured investors about the company’s long-term prospects in the region, despite increasing competition from local rivals like Huawei.
Analysts noted that Apple’s struggles in maintaining sales growth contrasted with the broader smartphone market, which saw a 10% increase in shipments in the first quarter. They attributed this partly to the lack of significant improvements in iPhone features since the launch of the iPhone 12 almost four years ago, which introduced 5G connectivity.
Apple is also facing legal challenges, including antitrust lawsuits in the US and Europe over its app store fees. Additionally, a lawsuit in the US against Google threatens the substantial payments Apple receives for making Google the default search engine on its Safari browser.
Looking ahead, Apple’s finance chief Luca Maestri expects sales to rise in the “low single digits” in the next quarter, with double-digit growth expected in its services business. Analysts remain cautiously optimistic about Apple’s future, citing better-than-expected performance in China and upcoming events that could boost investor sentiment.
