Apple is back. The electronics company clearly exceeded expectations with its business results presented on Thursday after the stock market closed and thus appears to have put a period of weakness behind it for the time being. This is mainly due to the iPhone, by far the company’s most important product. Sales of the device rose by 23 percent; a year ago they had shrunk slightly.
Despite the much better than expected figures, the share price was initially only slightly higher in after-hours trading. Apple has generally done well on the stock market recently, with its share price increasing by more than twenty percent in the past six months.
A turnaround is taking place on the market in China
The market capitalization is currently $3.8 trillion. However, Apple was recently overtaken by Google parent company Alphabet, whose market value is $4.1 trillion. The most valuable company in the world is the chip provider Nvidia with almost 4.7 trillion dollars.
Overall, Apple reported a 16 percent increase in sales for the past fiscal quarter to a record $143.8 billion. Analysts on average had expected $138.5 billion. Net profit also increased by 16 percent to $42.1 billion. Earnings per share of $2.84 were 17 cents higher than expected.
Apple is also optimistic about the next quarter and is predicting an increase in sales of 13 to 16 percent, significantly more than analysts previously expected. The company also expects to roughly maintain its profit margin, although it expects rising memory chip prices due to supply shortages to become more noticeable.
In the past few months it has become apparent that the iPhone 17, the latest generation of Apple cell phones, is selling well. But the now reported sales of the device of $85.3 billion were once again well above expectations. It therefore represented almost 60 percent of group sales. CEO Tim Cook spoke in a telephone conference of “unprecedented demand”.
The services business, the group’s second largest division, which includes platforms such as Apple TV and Apple Pay as well as the App Store, also developed well. Sales here rose by 14 percent to $30.0 billion. The picture was mixed in the other product categories. Sales of the iPad grew by six percent, while Macintosh computers fell by seven percent. In the division, which includes products such as the Apple Watch, the Airpods headphones and the Vision Pro computer glasses, sales fell by two percent.
Apple has achieved a turnaround in the important Chinese market. Sales here rose by 38 percent, after a decline of four percent in the previous quarter. Cook also blamed high demand for iPhones.
Despite stellar financial results, Apple is also struggling with some challenges at the moment, particularly on the product side. For example, the company is making much slower progress with its artificial intelligence initiatives than hoped. A new AI variant of the Siri assistance program that was announced in 2024 is now only expected to come out this year.
A few weeks ago it was announced that Apple was now calling on Google to help. The two companies announced a cooperation, according to which Apple’s AI functions will in the future be partly based on Google’s AI model Gemini. This should also apply to the delayed Siri version. Cook now said Apple was very happy with the collaboration. He did not want to give details about the financial conditions of the alliance.
Apple is also trying to strengthen its AI expertise in other ways. On Thursday it was announced that the company had acquired Q.ai, an AI start-up from Israel. No price was given, but the Financial Times put it at nearly $2 billion. This is a fairly expensive acquisition by Apple standards.
In the last quarter, Apple’s earnings were again burdened by import tariffs. This time the company put the additional costs at $1.4 billion, compared to $1.1 billion in the previous quarter. For a company the size of Apple, these are of course bearable sums.
