Apple Sees First Quarterly Revenue Increase in a Year
Apple has had plenty of challenges to start the year. The Apple Watch has been altered by patent lawsuits, the App Store has come under fire from developers, and the iPhone has faced renewed competition in China.
Topping it all off, the company was recently dethroned as the undisputed king of the stock market when Microsoft replaced it as the world’s most valuable public company.
But on Thursday, the tech giant showed the versatility and strength of its business, reporting that sales rose 2% to $119.58 billion during the three months that ended in December. It was the first quarterly revenue increase for Apple in a year and helped the company deliver $33.92 billion in profit during the period, a 13% increase from a year earlier.
The results showed that Apple had the ability to overcome a slowdown in device sales by getting its enormous customer base to buy more apps and services, such as Apple Music. The company said sales of software and services rose 11% to $23.12 billion during the period.
Shares of Apple fell about 1% in after-hours trading, even though the company exceeded analysts’ expectations for $117.99 billion in sales.
Although its signature products, the iPhone and iPad, are more than a decade old, Apple said the number of its devices in use around the world last year had increased by 200 million from the 2 billion it reported a year ago. Investors watch that figure closely because as iPhones, iPads and Apple Watches proliferate, more people are willing to pay Apple for things such as cloud-computing storage.
The iPhone, which accounts for more than half of Apple’s annual revenue, was the only Apple device to post an increase in sales during the quarter. Apple’s release of a new, titanium version of the device last year helped it increase the number of smartphones it sold by 5 million, according to Canalys, a market research firm. The uptick lifted iPhone sales 6% to $69.7 billion.
Squeeze on British businesses doesn’t let up
Britain’s economy faces a bracing fact: The number of companies that folded last year was the highest in three decades.
More than 25,000 companies registered as insolvent in 2023, the most since 1993, according to government data published this week. As pandemic-related support measures for businesses ended, the wreckage from years of high debt and interest rates, soaring prices and a cost-of-living crisis becomes clearer. Insolvencies have spread from small to larger businesses, analysts said.
Businesses still dealing with relatively high costs, demands for higher wages, supply chain uncertainties and wavering consumer confidence are hoping for brighter economic times. Slower inflation, stronger growth and cuts to interest rates are expected to come this year, but not soon.
On Thursday, the Bank of England held interest rates at 5.25%, the highest since 2008, and where they have remained since August, after rising from just above zero in a series of increases over a year and a half.
Policymakers said inflation had declined, including wage growth and services inflation, but some measures of persistence remained “elevated.”
There has been good news on inflation, “but we have to be more confident that inflation will fall all the way back to the 2% target and stay there,” Andrew Bailey, the governor of the bank, said Thursday.
“We are not yet at a point where we can lower interest rates.”
Inflation in Britain has dropped notably from its peak above 11% in late 2022 to 4% in December. Some economists expect inflation to slow to 2% in the spring.
From wire reports