Apple reported better-than-expected earnings in the third quarter of 2024, with rising optimism regarding its new AI features offsetting a continuing decline in its key China market. Earnings exceeded analyst predictions despite a year-over-year decline in iPhone sales, with revenue rising 4.9 percent to $85.78 billion in the three months ending June 29, beating the average analyst estimate of $84.53 billion. The company maintained its cash dividend at 25 cents for each share.
Key China market
Investors awaited Apple’s financial results for more insight into the company’s performance in the Chinese market, the tech giant’s third-largest market. Apple dropped out of the top five smartphone providers in the country for the first time earlier this year amid the rise in popularity of local brands like Vivo, OPPO and Huawei.
The third quarter earnings results revealed that Apple’s China sales declined 6.5 percent to $14.73 billion, an even greater decline than the 2.4 percent drop analysts had predicted.
iPhone sales better than expected
Despite struggling in the Chinese market, Apple’s overall iPhone sales reported better than expected numbers, falling only 0.9 percent to $39.30 billion. This improvement is due in part to rising demand in anticipation of Apple’s launch of its new AI features, which it announced at its annual developers conference in June.
Tech giant’s other segments
Apple also reported substantial growth in iPad sales. The segment rose 23.7 percent to $7.16 billion, above analyst expectations of $6.61 billion. This growth came after Apple launched a new AI-focused iPad Pro and a larger iPad Air in May to revive demand for a product line that had deteriorated in the past two years.
In the company’s wearables segment, Apple Watches and AirPods headphones, sales fell 2.3 percent to $8.10 billion, compared with analyst estimates of $7.79 billion.
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Market sentiment
The strong Apple report gave the tech market some hope for growth following lagging results from other tech giants like Amazon, Snap and Intel. The market saw a sell-off on Thursday amid disappointing results, including from Intel which announced plans to cut more than 15,000 jobs. Amazon’s stock also declined more than 4 percent on Thursday after the company reported lower-than-expected sales this quarter and forward-looking statements indicating a continued slowdown in the next quarter.
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