2024-02-01 21:37:00
The technology giant Dark recently published its financial results for the first quarter of 2024, according to its fiscal division. Apple reported revenues of $119.6 billion, thus beating analysts’ forecasts of $108.37 billion. In terms of earnings per share, the company reported $2.18 per share, beating analysts’ forecasts of $1.93 per share. Although Apple presented an increase in the revenue line, sales to the Chinese market fell in the quarter by 13%. Apple’s stock rose by about 35% in the last year (before the reports were published). The stock is now reacting in late trading, and is down 1.7%.
In this quarter, the technology giant lost its coveted title – as the technology giant with the highest market value. Microsoft, the company that caused a storm in the industry due to artificial intelligence, took the first place and even crossed the $3 trillion mark, a title that only Apple held until now. Now Apple is in second place, while Microsoft enjoys the new title.
The decline in sales in China and the new stores in India
In the corresponding quarter last year, Apple reported for the first time since 2019 a decrease in total revenue. The tech giant faced challenging economic conditions that led, among other things, to a drop in demand for its products and severe problems in China in aspects of production, sales, and more. Investors follow Apple and examine how the company deals with this, including against its competitors. Apple’s business is ultimately driven by two main vectors: iPhone sales and the services segment (such as Apple Music, Apple TV and more). Apple reported $69.70 billion in revenue from iPhone sales, thus beating/missing analysts’ forecasts of $67.9 billion.
Apple has already thought about long-term solutions and last year opened the first physical stores in India, where Apple identified a good consumer market. At the same time, according to the reports, Apple expanded its production specifically in India, to answer the crises in the supply chain in China.
In the current quarter, it was even reported that Apple has overtaken Samsung as the largest smartphone brand in the world in 2023, according to IDC data reported in the Greek Reporter. According to the data, Apple shipped 234 million smartphones to retailers and consumers during the year, thus achieving a 20% share of the market. Samsung shipped 226 million devices, accounting for a 19.4% share. It is likely that the new artificial intelligence capabilities in Samsung devices will give a boost to sales, so there is a probability that we will see another reversal.
Artificial intelligence and the change in the app stores
Another segment that Apple is interested in is the services segment. So far, Apple has not once mentioned the words “generative artificial intelligence” in its product set, even though its services have AI capabilities. Apparently, the company’s offices are working very hard to find the best solutions to provide the tools that will sweep consumers away. Investors enjoy hearing the words “artificial intelligence” on Wall Street, and the assumption is that when Apple comes out of the closet with its tools, it will trigger a significant movement in the stock’s performance. Apple reported revenues of $23.1 billion from the services segment, thereby beating/missing analysts’ forecasts of $23.3 billion. Apple’s services business is closely watched on Wall Street and sees growth regularly, due to the fact that profits on services are higher than on hardware sales.
In the past quarter, Apple announced a fundamental change in its app stores, perhaps the biggest since its launch and announced that it is changing the rules for developers in the European Union due to the new legislation there. Apple is about to allow third-party app stores to run on its operating system, which means that Apple will not be the sole gatekeeper for content that will enter the device. In order to protect consumers, Apple emphasized that these stores will have to be approved by the company, and will be required to give explicit permission to download apps. As soon as the platform exists on the device, you can download whatever you want – even if it’s apps that violate Apple’s policies.
The meaning of the change is also in relation to the commission – if you skip Apple and download the application or use another payment system, Apple cannot collect its commission from each purchase. Therefore, Apple is changing the requirements: apps that will be distributed through the Apple app store and choose to use an alternative payment system, will pay a commission of 17% (and not 30% as it was before). An additional 3% fee applies to developers who choose to use Apple’s clearing system.
For your attention: The Globes system strives for a diverse, relevant and respectful discourse in accordance with the code of ethics that appears in the trust report according to which we operate. Expressions of violence, racism, incitement or any other inappropriate discourse are filtered out automatically and will not be published on the site.
#Apple #beat #forecasts #reported #decline #revenue #Chinese #market