Apple's earnings report surpassed expectations on Thursday, with robust iPhone sales demonstrating resilience amidst concerns about the impact of potential US tariffs.
However, Apple's stock dipped almost 3% after the bell, as lukewarm results from its services division and delays in AI initiatives curbed the enthusiasm of investors, as reported by .
The tech titan, headquartered in California, disclosed revenues of $95.4bn and a net income of $24.8bn for the March quarter, slightly outperforming analyst forecasts.
A notable highlight was the iPhone revenue, which soared to $46.8bn, driven by consumer appetite for Apple's latest mid-tier iPhone, priced at $599 and equipped with advanced AI capabilities.
Consumers rush to buy ahead of tariffs
The looming threat of tariffs has seemingly spurred a buying spree, particularly stateside, where Apple's reliance on a China-centric supply chain has come under scrutiny.
Despite electronics being exempt from President Trump's most severe recent tariffs, Apple is still vulnerable to a 20% duty on Chinese goods and could face further impositions if trade negotiations deteriorate.
CEO Tim Cook noted that inventory levels are well-calibrated, suggesting an absence of significant stockpiling, yet analysts speculate that the fear of trade sanctions may have artificially inflated sales figures.
"Apple edged out a beat thanks to resilient iPhone sales, though it's unclear how much of that is sustainable once tariffs bite," commented Matt Britzman, equity analyst at Hargreaves Lansdown.
"Apple remains the world's strongest consumer brand, but it's also navigating multiple headwinds – from AI delays to manufacturing moves and intense competition in China."
In response to escalating political pressures in the US, Apple CEO Tim Cook has unveiled plans for the company to procure $19 billion worth of semiconductors from American factories. This strategic pivot is designed to mitigate legislative scrutiny and respond to calls from figures such as President Trump for tech giants to "build in America."
AI ambitions delayed
Meanwhile, Apple has seen its services sector, encompassing offerings like iCloud, the App Store, and Apple TV+, report revenues of $26.65 billion, which fell short of industry predictions. The underperformance contributes to growing apprehensions surrounding Apple's foothold in AI technology, particularly as the anticipated overhaul of Siri is now postponed until 2026.
Commenting on the setback, Chris Allinson, a partner at Yonder Consulting, expressed concerns about Apple’s operational prowess stating, "The Siri delay reflects a deeper issue with Apple's execution discipline," further noting, "This was once the most reliable product machine in tech. Now it's missing key innovation windows."
In a move perceived as turning to fiscal strategies to support investor rewards during times of strategic flux, Apple's board has endorsed a colossal $100 billion share repurchase programme and declared a 4% increase in dividends, maintaining the pattern set in previous years.
Cautious optimism for the road ahead
Apple's current trajectory emphasises its sustained supremacy in device manufacturing but simultaneously underscores the constraints of an ecosystem now contending with strategic pressures.
While its brand continues to hold sway, innovation has hit a roadblock, and competitors are making quicker strides in AI and software differentiation.
With the threat of tariffs, ongoing delays in AI, and production moving towards the east, Apple's forthcoming phase will hinge not only on product quality but also on political manoeuvring, supply chain flexibility, and its ability to still astonish an oversaturated market.
