Apple’s iPhone sales are recovering from a recent slump amid the rise of artificial intelligence, but shares are still falling

SAN FRANCISCO — Apple has overcome a recent slump in iPhone sales during the summer quarter, an early sign that its recent efforts to revive demand for its marquee product using artificial intelligence are paying off.

According to Apple’s fiscal fourth-quarter report released Thursday, iPhone sales totaled $46.22 billion in the July-September period, up 6% from the same period last year. The improvement reversed two consecutive year-over-year quarterly declines in iPhone sales.

Increased iPhone sales helped Apple deliver total quarterly revenue and earnings that beat analysts’ forecasts weighing on investors, excluding a one-time $10.2 billion charge related to a recent European Union court ruling that put the Cupertino, Calif.-based company on hold. at a huge expense. for tax arrears.

Apple earned $14.74 billion, or 97 cents per share, down 36% from the same period last year. If not for the one-time tax hit, Apple said it would have earned $1.64 per share, topping the $1.60 per share expected by analysts, according to FactSet Research. Revenue rose 6% year over year to $94.93 billion, about $400 million more than analysts had forecast.

But investors were apparently hoping for an even better quarter. Apple’s share price fell 1% in extended trading after the data was released.

The results reflect the first few days that consumers have been able to buy the new iPhone 16 lineup, which includes four different models designed to handle various artificial intelligence wizardry that the company bills as “Apple Intelligence.” The branding is part of Apple’s efforts to differentiate its approach to artificial intelligence from competitors such as Samsung and Google, which have already begun incorporating the technology into smartphones.

Even though the iPhone 16 was specifically designed with artificial intelligence in mind, the technology didn’t become available until Apple released a free software update earlier this week that enabled the first batch of technological tricks, including a feature designed to make it virtual assistant Siri is smarter. , more versatile and colorful. And these improvements are only available in the US for now.

Apple plans to expand artificial intelligence to other countries in the coming months, as well as release other software updates that will bring even more technology to the iPhone 16 and the two high-end iPhone 15 models, which also feature a dedicated computer. chips needed for cool new features.

Investors are betting that as Apple’s AI becomes more accessible, it will trigger a flurry of upgrades among the hundreds of millions of consumers who use older iPhones that will feel woefully outdated because they can’t handle the latest technology.