SAN FRANCISCO (AP) — Apple snapped out of a yearlong sales funk during its holiday-season quarter, propelled by solid demand for the latest model of its iPhone and still-robust growth in a services division facing legal threats that could undermine its future prospects.
The modest revenue growth announced Thursday as part of Apple’s October-December results ended four consecutive quarters of year-over-year sales declines. But the performance still may not be enough to allay recent investor concerns about Apple’s ability to rebuild the momentum that established it as the most valuable U.S. publicly traded company.
After years of holding that mantle, Apple recently ceded the top spot to its long-time rival Microsoft, which has been elevated largely through its early leadership in artificial intelligence technology.
Apple is hoping to shift the narrative back in its favor with Friday’s release of its Vision Pro headset that transports users into a hybrid of physical and digital environments — a combination the company is promoting as “spatial computing.” But the first version of the Vision Pro will cost $3,500 — a lofty price tag analysts expect to constrain demand this year.
Despite recurring worries that Apple may be entering a period of slower growth compared with its track record over the past 20 years, the Cupertino, California, is still thriving.
Apple’s revenue for its most recent quarter rose 2% from the same time in the previous year to $119.58 billion. The company earned $33.92 billion, or $2.18 per share, a 13% gain from the same time last year.
As usual, the iPhone accounted for the bulk of Apple’s revenue. Sales of the company’s marquee product totaled $69.7 billion in the past quarter, a 6% increase from the same time in the prior year. Those results include the latest iPhone that came out in late September, including a premium model that includes a special video recording feature designed for playing back on the Vision Pro.
Apple’s services division, which is tied largely to the iPhone, posted an 11% rise in revenue from the previous year to $23.12 billion.
Both the revenue and earnings for the quarter exceeded analysts’ projections, according to FactSet Research.
But investors appeared unimpressed with the showing as Apple’s stock price dropped 2% in extended trading after the numbers came out.