Apple Bets on AI to Boost iPhone Sales Amidst China Slowdown

Apple's third-quarter iPhone sales exceeded expectations, driven by anticipated AI features, despite a decline in its China market. The tech giant expects continued revenue growth and plans significant iPhone upgrades. However, China remains a challenge, prompting Apple to offer discounts. Regulatory scrutiny in both the EU and US persists.

Apple stated that its third-quarter iPhone sales surpassed expectations, forecasting more gains as it leans on artificial intelligence to attract buyers, despite underperformance in its China business. The company’s stock rose nearly 1% in extended trading, outshining other tech stocks.

According to Apple, the fiscal fourth-quarter revenue is expected to grow similarly to the 4.9% increase seen in the April-June period, better than analysts' estimates. Sales of iPhones fell by 0.9%, outperforming the 2.2% drop analysts had predicted. CFO Luca Maestri remarked that iPhone sales surpassed his expectations.

Nonetheless, China, Apple's third-largest market, was a weak spot with a 6.5% sales decline. Maestri noted that excluding foreign exchange effects, the dip was less severe. Discounts on iPhones have been implemented in China to compete with local brands. The upcoming iPhone 16 series and recent AI initiatives are seen as potential growth drivers.