Apple Beats Q3 Expectations Despite A Decline In Iphone Sales


Apple Beats Q3 Expectations Despite A Decline In Iphone Sales
Apple Beats Q3 Expectations Despite A Decline In Iphone Sales
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Apple Inc. (AAPL) released its third-quarter earnings yesterday after the bell successfully beating estimates despite a YoY decline in iPhone sales. These are mainly due to satisfied and loyal customers led to an increase in the active installed base of Apple devices at an all-time high across the world. With these inputs, Apple can maintain itself as the leader and pioneer in the smartphone industry.

Apple CEO Tim Crook

Image Source: Yahoo Finance 

iPhone Sales and China Market

The revenue generated from Greater China alone was $14.7 billion, which was below the expected amount according to several analysts of $15.2 billion. In the same quarter of the previous year, the company recorded $15.7 billion in revenue in China market. Though it failed to meet the prediction, total iPhone sales stood at $39.2 billion, which is still slightly under the expected $38.9 billion. This figure was lower than the $39.6 billion, which was witnessed in Q3 2023. Apple’s Chief Financial Officer, Luca Maestri said that the company was seeing sales momentum in the region. This positive outlook was brought about by record upgrades and improved performances in the second half of the year.

Financial Performance

Apple has had an EPS of $1.40 with sales revenue of $85.5 billion. Before the announcement, analysts had expected EPS of $1.35 and revenues of $84.4 billion. In the same period of the prior year, EPS stood at $1.26, and the revenues were $81.7 billion. Services revenue hit $24.2 billion, compared to the Street’s expectation of $23.9 billion. iPad sales reached $7.1 billion, less than the projected $6.6 billion, due to the new iPad Pro series. Mac revenue increased to $7 billion which was $ 6.8 last year. Wearables sales fell to $8 billion from $8.2 billion.

Apple Beats Q3 Expectations Despite A Decline In Iphone Sales

Image Source: Yahoo Finance 

Upcoming Launch and Compatibility

Apple also unveiled its pending new release of its Apple Intelligence software based on the generative AI technology. The iPhone, iPad, and Mac versions of the software will be released in October. It is important to note that Apple Intelligence is supported only by iPhone 15 Pro and the latest iPhone models, which could prompt users to switch to more recent devices.

Factors expected to drive Apple’s growth in the next quarter

Apple’s services segment is still expanding and has set a record in Q3 2024. Growth expectations are in the double digits observed in the first half of the current fiscal year. Some expectations for the double-digit growth in iPad revenues are due to the fresh iPad Pro line. Apple expects gross margins in the range of 45.5% and 46.5% and operating expenses around $14.3 billion to $14.5 billion. All these coupled with Apple’s enviable customer satisfaction and loyalty make the company robust and creative in the market.

Apple’s plans to maintain its competitive edge

iPhone is well-integrated with other Apple products and services which helps to maintain customer loyalty and limits customers’ desire to switch to other brands. Apple sold more expensive phones but managed to achieve its highest global market share in 2023. They include a focus on professional devices, attractive trade-in programs, and interest-free financing. Apple remains, therefore, keen on investing heavily in innovations that enhance the lives of the users. The next Apple Intelligence based on generative AI models demonstrates their adherence to innovation.

Conclusion

Apple has maintained steady financial growth even amidst iPhone sales issues is an indication of the company’s strength and creativity. The upcoming release of Apple Intelligence, an innovative personal intelligence system based on generative AI models, is expected to boost user loyalty and may result in device upgrades.


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Disclaimer -We have collected this information from our direct sources, various trustworthy sources on the internet and the facts have been checked manually and verified by our in-house team.