Despite Apple (NASDAQ:AAPL) surpassing earnings expectations for the first quarter, the company’s stock faced a decline in early trading on Friday. The drop is attributed to lower-than-expected sales in China, a crucial market for Apple.
In the previous quarter, Apple reported earnings per share of $2.18 on revenue of $119.6 billion, beating analyst estimates of $2.11 on revenue of $117.9 billion. However, sales in China, Apple’s third-largest market, fell short at $20.8 billion, compared to Wall Street’s anticipated $23.5 billion. In the same quarter last year, Greater China sales reached $23.9 billion.
The stock witnessed a more than 2% decline at the start of Friday’s trading session. The challenges in the Chinese market include a sluggish economy and increased competition from Huawei.
Apple’s performance in North America and Europe helped offset the China setback, with iPhone sales reaching $69.7 billion, exceeding expectations of $68.6 billion. Apple CEO Tim Cook highlighted revenue growth, all-time high active device installations surpassing 2.2 billion, and record-breaking revenue in Services.
However, Mac revenue fell slightly below analysts’ expectations at $7.8 billion, and iPad revenue missed the mark at $7 billion, compared to the expected $7.1 billion. Wearables, home, and accessories generated $12 billion, meeting estimates. Apple faces a patent dispute with medical device maker Masimo, impacting its Series 9 and Ultra 2 watches.
The Services segment reached $23.1 billion, slightly below the anticipated $23.4 billion. Apple is gearing up for the launch of its Vision Pro AR/VR headset on February 2, priced at $3,499. While the device is impressive, its high cost may limit consumer sales. CEO Cook mentioned strong interest from enterprise customers in the Vision Pro during the earnings call, highlighting demonstrations showcasing the headset’s capabilities.
Apple’s introduction of refreshed iPads and Macs in March, along with the launch of the Vision Pro, could positively impact sales in the coming year.
Featured Image: Unsplash
Author Stephanie Bédard-Châteauneuf 
