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Apple’s Quarterly Revenue Declines Persist, Despite High iPhone Demand

Apple reported its fourth consecutive decline in quarterly revenues, despite strong demand for the new iPhone. The tech giant generated £73.5 billion in sales for the three months ending in September, a 1% decrease from the previous year. However, iPhone sales reached a record high of £35.9 billion during this period, and the services division, encompassing Apple Music and TV, exceeded £18 billion in revenue for the first time.

Sales of Macs, iPads, and wearables, however, remained underwhelming, hindering Apple’s efforts to sustain the growth it experienced during the pandemic. Nonetheless, the company’s profits for the fourth quarter reached £18.8 billion, marking an 11% increase from the same period in the prior year. For the entire fiscal year, Apple reported total revenue of £314 billion, down from £322 billion in the previous year.

Notably, these results do not incorporate sales from the recently released iPhone 15, which is expected to boost business in the crucial holiday season.

Apple CEO Tim Cook commented, “Today Apple is pleased to report a September quarter revenue record for the iPhone and an all-time revenue record in services. We now have our strongest product lineup ever as we head into the holiday season.”

The market response to these results was mixed, with investors showing concerns about increasing competition from Huawei in China, Apple’s third-largest market. Chinese revenue declined by approximately 2.5% during the quarter, and Cook noted that supply constraints were affecting the new high-end iPhone 15 Pro and Pro Max models.

Tech analyst Dan Ives of Wedbush noted, “Apple delivered solid results with services as the shining star, while iPhone revenues met expectations. China remains a bit soft for Apple, but this dynamic appears to be under control.”

These results conclude the earnings season for major tech companies, with Amazon reporting significant profits. The retail giant recorded profits of £8 billion for the quarter, surpassing the £2.3 billion earned in the same period the previous year. Amazon’s sales reached £118 billion, up 13% from the previous year, exceeding Wall Street estimates by roughly £2 billion. Other tech giants, such as Alphabet and Microsoft, also posted a combined profit of £35 billion last month as they capitalised on the potential of artificial intelligence.

Dipanjan Chatterjee, an analyst at Forrester VP, highlighted the rapid growth in Apple’s services division, which helped offset the declines in Mac and iPad sales. Chatterjee also emphasised the positive impact of services on Apple’s revenue, citing their ability to create customer loyalty, generate recurring income, and yield higher profit margins compared to product sales.

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