Apple's sales fall for the fourth consecutive quarter
For the first time since 2019, Apple has seen a drop in its annual revenue, with a 3% decrease from the previous fiscal year. Despite the popularity of the newest iPhones, the tech giant's sales have been on a downward trend for four consecutive quarters. The fiscal year ended with a slight decline in sales during the July-September period, as each quarter experienced lower revenue than the previous year. Apple CEO Tim Cook attributed this to an unstable macroeconomic climate.
Profit rises amid revenue decrease and challenges in China
While Apple's revenue dipped by 1% to $89.5 billion in the most recent quarter, its profit increased by 11% to $22.96 billion. However, the company saw a 2% drop in revenue from China compared to the same time last year. Cook believes that Apple is gaining market share in China but admits that a slow economy is causing consumers to cut back on spending, stating, "I view China as an incredibly important market and I am very optimistic about it."
iPhone sales climb and service division revenue increases
However, Apple's iPhone sales rose 3% to $43.8 billion, suggesting that the latest models are well-received as the holiday shopping season approaches. Apple's service division had a strong quarter with revenue of $22.31 billion, a 16% increase from last year. A large portion of this revenue is derived from Google, which pays Apple to make its search engine the default option on iPhones and Safari browsers, a deal that is now the focal point of Google's antitrust trial.
Google's payments to Apple at risk due to the trial
The collaboration between Apple and Google is currently under scrutiny in the antitrust trial that could potentially affect the revenue Apple receives from Google. Evidence presented during the trial showed that Google paid over $26 billion to Apple and other companies in 2021 to secure a favorable position for its search engine. Analysts estimate that Apple gets between $4 billion and $5 billion each quarter from Google, a revenue source that could vanish if a judge deems the payments anticompetitive.
