Apple iPhone Sales Dip Over Christmas Period, Despite AI

Shares in Apple rose more than 2 percent on Friday as the firm posted mostly positive Q1 financials, despite a slight decline in iPhone sales over the Christmas holiday period.

Apple’s first quarter results saw another increase in both profits and revenues, but overall sales in China (a key market for Apple) fell 11.1 percent during the quarter to $18.5bn (£14.9bn) from $20.8bn (£16.8bn), amid stiff competition from local handset makers.

Apple results during the Christmas break also revealed that iPhone sales have declined slightly, despite the firm heavily promoting its Apple Intelligence features in certain key markets.

Q1 financials

For the first quarter ending 28 December 2024, Apple posted a net profit up 7.1 percent at $36.3bn (£29.3bn), compared to a net profit of $33.9bn (£27.3bn) in the same year-ago quarter.

Quarterly revenues also rose to $124.3bn (£100.2bn) for the first quarter, from $119.6bn (£96.4bn) in Q1 last year.

“Today Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4 percent from a year ago,” said Tim Cook, Apple’s CEO. “We were thrilled to bring customers our best-ever lineup of products and services during the holiday season.”

“Through the power of Apple silicon, we’re unlocking new possibilities for our users with Apple Intelligence, which makes apps and experiences even better and more personal,” said Cook. “And we’re excited that Apple Intelligence will be available in even more languages this April.”

Product breakdown

Digging into the results, Apple revealed that iPhone sales accounted for $69.1bn in the first quarter, down slightly from $69.7bn in the same year-ago quarter.

Q1 performance from Apple’s other product lines was somewhat mixed.

Mac sales were up 15 percent at $8.98bn from $7.78bn; iPad sales were also up 15 percent at $8bn from $7bn; sales at Wearables, Home and Accessories were down 2 percent to $11.7bn from $11.9bn, and finally Services were up 14 percent at $26.3bn, from $23.1bn a year-ago.

Apple also confirmed it would pay a dividend of $0.25 per share and spent $30 billion on dividends and share repurchases during the first quarter.

Apple’s result come after a tough week for the US, when almost $1 trillion was wiped off US tech stocks.

Chinese AI firm DeepSeek had on Monday rattled world markets, after its AI chatbot app rose to the top of Apple’s iPhone download charts in the US and elsewhere.