Apple plans a record $110 billion stock buyback following a challenging earnings report.

Apple’s first-quarter results revealed a tale of two stories. While the company announced a staggering $110 billion share buyback, the largest in its history, its financial report painted a picture of sluggish growth. iPhone sales, a crucial revenue driver, dipped 10% year-over-year, raising concerns about demand for the iPhone 15 lineup.

The report, released on Thursday, showed overall revenue of $90.8 billion, falling short of expectations and marking a 4% decline compared to the same period last year. Net income also took a slight hit, reaching $23.6 billion.

However, there were bright spots. Services, a segment encompassing iCloud, Apple Music, and App Store revenue, exceeded analyst estimates with a robust $23.9 billion haul. Mac sales also saw a modest 4% increase to $7.5 billion.

CEO Tim Cook, during the earnings call, downplayed the iPhone slump and highlighted these positive aspects. He also hinted at Apple’s future plans in the realm of artificial intelligence, promising to reveal more about the company’s vision for generative AI in the coming weeks.

The news comes amidst a challenging economic climate and Apple’s struggles in China, a crucial market. Rising nationalism, a sluggish economy, and fierce competition from domestic players like Huawei and Xiaomi have eroded Apple’s momentum in the region. Despite Cook’s claims of iPhone sales growth in mainland China, the global picture paints a different story, with a 10% decline in smartphone shipments.

Looking beyond China

Apple reported revenue records in over a dozen regions, offering a glimmer of hope. The company’s stock price, however, has taken a beating, dropping over 8% in 2024. Yet, Apple’s resilience is undeniable, having overcome numerous obstacles to reach its current position as a global leader with a market capitalization of $2.6 trillion.

The future seems to be heavily focused on AI.

Cook’s comments hint at the integration of generative AI tools into Apple products, an area where the company currently lags behind competitors. Rumors also suggest potential partnerships with AI leaders like OpenAI to power features like iPhone chatbots. With Apple’s annual developer conference just around the corner, we can expect further details on the company’s AI ambitions in the coming weeks.