Apple’s business returns to growth, Tim Cook says the company spends “a huge amount of time and effort” on AI development

Apple has reported a return to growth in its first fiscal quarter, ending a series of four consecutive quarters of revenue decline, reports Silicon Angle. Despite these positive developments, Apple’s shares fell in extended trading due to a more than 13% drop in sales in the key Chinese market and warnings of potential weakness in iPhone sales in the current quarter.

For the first quarter of fiscal year 2024, Apple announced earnings of $2.18 per share before certain expenses, such as stock compensation, which exceeded analysts’ expectations of $2.10 per share. Revenue grew by 2% to $119.58 billion, which exceeded the forecasted $117.91 billion. Net profit for the quarter amounted to $33.91 billion, up from $29.9 billion in the previous year.

Apple has refrained from providing official guidance for the current quarter, which has become standard practice since the beginning of the COVID-19 pandemic. However, Apple’s CFO Luca Maestri said during a conference call that iPhone sales in the current quarter are expected to be similar to the previous year, after adjusting for $5 billion in sales, due to an excess of performance during the resumption phase of supply after the closure of factories related to the pandemic.

Investors showed initial enthusiasm after the results were released, but Apple shares quickly sank, falling more than 3% in afternoon trading. This reaction occurred despite Apple’s gross profit increasing to 45% for the quarter and the company’s return to growth after a previous decline in revenue.

Tim Cook, Apple’s CEO, emphasized the “huge acceleration” of some of the company’s growth rates compared to the previous quarter, despite the fact that this quarter was one week shorter than last year. Revenue from iPhone sales for the quarter amounted to $69.7 billion, up almost 6% year-on-year, reflecting strong demand for the new iPhone 15 models introduced in September.

The service business, which includes Apple Music subscriptions, warranty service, advertising, Apple Pay revenue, etc., also showed growth, with sales increasing by 11% to $23.11 billion in the quarter. Investors are closely watching this growth as a key area for Apple’s expansion.

Apple now boasts 2.2 billion active devices, up from 2 billion a year earlier, which indicates growth prospects for the service division. Despite the problems in the Chinese market and the decline in iPad sales, Apple’s smartwatch business showed positive results, and sales exceeded expectations.

Cook also hinted at Apple’s plans to dive deeper into artificial intelligence, suggesting that the company will make a major announcement later this year to compete in the generative AI industry alongside the big tech companies.

According to Cook, Apple is spending “a tremendous amount of time and effort” on artificial intelligence features that will be announced in the coming months.

Cook also claims that Apple “didn’t jump on the AI bandwagon” just to catch up with the rest of the industry. According to him, the company was looking for the right time to add AI features – and it found it.