Apple sold $46 billion worth of iPhones over the summer as artificial intelligence helps end slump

SAN FRANCISCO — Apple has overcome a recent decline in iPhone sales in the summer quarter, an early sign that its recent efforts to revive demand for its 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 and appeared disappointed by Apple’s guidance, which implied that the company’s revenue for the October-December quarter covering the holiday shopping season might not grow as much as analysts had expected. Apple’s share price fell about 2% in extended trading Thursday, leaving shares hovering around $221, well below the $237 peak reached in mid-October.

The latest quarterly 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 work with different artificial intelligence features 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.

“This is just the beginning of what we think generative AI can do,” Apple CEO Tim Cook told analysts on a conference call Thursday.

Cook said he plans to expand the iPhone’s AI features to other countries in December, 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 special computer chips needed to enable the new features. . The December expansion will include the ability to connect to OpenAI’s ChatGPT to take advantage of technologies Apple doesn’t build on its own. More languages

Investors are betting that as Apple’s AI becomes more widely available, it will encourage hundreds of millions of consumers using older iPhones to upgrade to newer models to get their hands on the latest technology.

“We believe this is a compelling reason to upgrade,” Cook said. But Investing.com analyst Thomas Monteiro believes iPhone sales would already be growing at a faster pace if consumers were wowed by Apple’s artificial intelligence technology, which would increase pressure on the company “to do a better overall job of impressing the public.”