Apple’s third-quarter profits were a mixed bag, with iPhone revenue continuing to fall. The handset earned $39.67 billion in the third quarter, down from $40.66 this time last year. The decline is not an outlier in the context of a falling smartphone market. However, the company’s sustained success in services offset the hardware slowdown once again, as sales grew from $19.6 billion to $21.2 billion year over year, exceeding analyst estimates.
When Apple announced its profits today, it naturally led with the services win.
“We are pleased to report that we set an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets as a result of robust iPhone sales,” CEO Tim Cook said in a statement. “From education to the environment, we continue to advance our values while championing innovation that improves our customers’ lives and leaves the world a better place than we found it.”
It’s awful for smartphone makers everywhere — and has been for a while, thanks to slower upgrade cycles, increased pricing, supply chain bottlenecks, and various economic headwinds, among other things. Growth in China, on the other hand, aided Apple’s performance. Sales in Greater China increased by 8% year on year, as Apple claims to have increased its market share in the world’s largest smartphone market.
Meanwhile, Cook told CNBC that the corporation has been secretly working on generative AI for years.
“We see AI and machine learning as fundamental core technologies.” And they’re practically built into every product we make,” the executive explained. “On a research basis, we’ve been doing research on AI and machine learning, including generative AI, for years.”
The announcement comes as major competitors such as Microsoft and Google have made news for their work in the increasingly buzzy field. Cook also mentioned plans to demo the company’s Vision Pro headset in stores. The “spatial computing” device unveiled at WWDC in June will be available early next year.