Apple weathers iPhone sales slump, buoyed by AI optimism

Investors remain bullish on tech giant as focus shifts to generative AI potential.

Apple (AAPL) recorded its biggest drop in iPhone sales since the early days of the COVID-19 pandemic, with revenue from January to March down 10% year-over-year to $90.8 billion (£72.4 billion). The dip marked the company’s fifth consecutive quarterly revenue decline.

Despite the sales slump, Apple’s share price rose nearly 7% after the earnings release, as investors shrugged off the disappointing figures in anticipation of the company’s forthcoming artificial intelligence (AI) offerings. Net profit for the quarter stood at $23.64 billion (£18.85 billion), a modest 2% decline from the same period last year.

While details remain scant, Apple CEO Tim Cook highlighted the company’s “significant investments” in generative AI, expressing optimism about its potential applications. “We’re looking forward to sharing some very exciting things,” Cook remarked, as rivals like Samsung have already integrated generative AI chatbots into their latest smartphone offerings.

Analysts expect the next iPhone iteration to feature AI microchips and larger screens, with generative AI capabilities potentially allowing users to write code, compose essays, or create images through simple prompts. Apple is set to unveil its latest software at its annual Worldwide Developers Conference in June.

Apple shares are up 2.2% at premarket open.

Subscribe to Investomania for more business news and updates.

Sign up for Investomania

Subscribe to the Investomania newsletter to have our daily recap delivered directly to your inbox.

No spam. Unsubscribe anytime.