In a surprising turn of events, Apple has reported a 6% increase in iPhone sales for the July-September quarter, marking the end of a recent sales slump. This upturn is attributed to the company's strategic integration of artificial intelligence (AI) into its latest iPhone models.
The tech giant's fiscal fourth-quarter report revealed iPhone sales totaling $46.22 billion, reversing the trend of two consecutive quarters of year-over-year declines. This boost in iPhone sales contributed significantly to Apple's overall performance, with the company surpassing analyst projections for total quarterly revenue and profit.
Apple's earnings for the quarter stood at $14.74 billion, or 97 cents per share. While this represents a 36% decrease from the same period last year, it's worth noting that the figures were impacted by a one-time charge of $10.2 billion related to a European Union court decision on back taxes. Excluding this charge, Apple's earnings would have been $1.64 per share, exceeding analyst expectations.
The company's latest iPhone 16 lineup, which includes four models designed to handle various AI capabilities, has played a crucial role in this sales resurgence. Apple has branded these AI features as "Apple Intelligence," aiming to differentiate itself from competitors like Samsung and Google in the smartphone AI race.
Tim Cook, Apple's CEO, expressed optimism about the potential of generative AI in iPhones, stating, "This is just the beginning of what we believe generative AI can do." The company plans to expand its AI iPhone features to more countries in December and introduce additional software updates to enhance AI capabilities in the iPhone 16 and high-end iPhone 15 models.
Despite the positive sales figures, Apple's stock price experienced a slight dip in extended trading, possibly due to a cautious forecast for the upcoming holiday shopping season. This suggests that investors may have been anticipating even stronger results.
As Apple continues to roll out its AI features and expand their availability, the company hopes to encourage owners of older iPhone models to upgrade. However, some analysts believe that if consumers were truly impressed by Apple's AI technology, iPhone sales would be accelerating at an even faster pace.
The coming months will be critical for Apple as it seeks to leverage its AI capabilities to maintain and potentially increase its market share in the highly competitive smartphone industry.