Apple’s profit has surpassed Wall Street predictions, despite a drop in iPhone sales. The company’s strong performance in the Chinese market has helped offset the global decline in smartphone sales. While sales for the fiscal third quarter decreased by 1.4% to $81.8 billion, earnings per share rose by 5% to $1.26, exceeding analyst expectations.

Although iPhone sales slightly missed estimates, robust sales in the services segment, which includes Apple TV+, and growth in China by 8%, made up for it. In the face of tough competition from Android rivals and the delayed release of its Vision Pro mixed-reality headset, Apple plans to integrate artificial intelligence (AI) into its products. CEO Tim Cook mentioned that the iPhone will soon have the capability to transcribe voicemail messages in real time.

China’s smartphone market experienced its weakest performance in nearly a decade, with overall sales declining by 8% in Q2 2021. However, Apple managed to outperform its competitors, recording double-digit growth in iPhone sales. Cook attributed this success to attracting new iPhone users and strong upgrade activity.

Apple’s services segment, including Apple TV+, generated $21.21 billion in revenue, surpassing analyst estimates. The company now has 1 billion subscribers on its platform, encompassing its own services and third-party apps. The wearables segment, featuring the Apple Watch and AirPods, also performed well with revenue of $8.28 billion. Mac and iPad sales reached $6.84 billion and $5.79 billion, respectively. Nearly half of Mac buyers in the quarter were new to the product, indicating a strong trend of upgrader activity to Apple Silicon.

Apple’s ability to exceed expectations despite declining iPhone sales highlights its resilience and strength in other sectors, particularly in China. The company’s focus on AI development and upcoming innovative products like the Vision Pro mixed-reality headset position it for continued success in the ever-evolving tech industry.

Useful links related to the article:
1. Counterpoint Research – Global Smartphone Shipments and Market Share
2. Apple Newsroom – Second-Generation iPhone SE