iPhone sales, which comprise over 50% of Apple’s revenue, have declined for two consecutive quarters. Notably, sales in China have been particularly weak. Some analysts believe that the delayed introduction of Apple’s AI features, expected with the iPhone 16 series, might prevent a significant rebound in sales in the latter half of this year.
On August 1, Apple reported that iPhone sales from April to June totaled approximately $39.3 billion, marking a slight decrease of about 1% compared to last year. Despite this drop, Apple’s overall revenue increased by 5% to $85.8 billion, surpassing Wall Street’s expectations.
In the second quarter of this year, Apple’s revenue in China (including Taiwan and Hong Kong) fell sharply to $14.7 billion, down over 6% from the previous year. This decline is attributed to Huawei’s recent push into the high-end smartphone market, a segment where Apple traditionally performs strongly. The Chinese market is Apple’s third-largest regional market, behind the U.S. and Europe.
According to research firm Counterpoint, iPhone sales in China fell 5.7% year-over-year in the second quarter as Chinese competitors like Huawei gained market share.
In response, during a conference call following the earnings report, Apple CEO Tim Cook expressed confidence in the company’s long-term prospects in the Chinese market.
The growth in Apple’s services sector has partially offset the decline in iPhone sales. Revenue from services, including the App Store and streaming services, surged by over 14% year-over-year in the second quarter, reaching $24.2 billion.
Looking ahead, Apple is counting on its new AI features to boost iPhone sales. The Apple Intelligence feature will debut with the iPhone 16 series and will be available on the premium iPhone Pro models. However, the rollout of these AI features has been delayed. They will not be available on the initial release of iOS 18, which launches in September. Instead, they are expected to be included in the subsequent iOS 18.1 update, released a few weeks later.
Despite these challenges, Apple reported a net profit of $21.45 billion for the second quarter, a 7.9% increase from the $19.88 billion earned during the same period last year.
