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Apple Reports Record Revenue, But Faces Challenges In China And iPhone Sales

by THEFUTURE.TEAM

January 31, 2025

Apple, the world’s most valuable company, released its latest financial results on Thursday, revealing record revenue and profit, but also a dip in iPhone sales and disappointing figures from its key market, China.

Key Details

Apple reported a record $124.3 billion in revenue for the last three months of 2024, slightly surpassing Wall Street’s forecast of $124.26 billion, according to FactSet. Earnings per share hit $2.41, outperforming analysts’ estimates of $2.35, and surpassing the record set in Q4 2023. Despite these strong overall results, iPhone sales came in at $69.1 billion, falling short of the anticipated $70.7 billion, and marking a decline compared to the same period last year. This occurred even with the launch of the new iPhone 16 featuring integrated AI capabilities.

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Sales in China were another disappointment, totaling $18.5 billion, well below the forecasted $20.9 billion, reflecting an 11% drop from the previous year.

Despite these challenges, Apple saw a 4% year-on-year revenue growth and a 10% increase in net income, largely driven by its high-margin services division. This segment, which includes the App Store, AppleCare, and Apple Music, generated a record $26.3 billion in revenue, up 14% from the previous year.

Ahead of the earnings release, Apple’s shares fell 0.7%, and continued to dip slightly after the results were published. However, the stock remains up over 5% for the week. Apple also benefitted unexpectedly from the market volatility triggered by the launch of DeepSeek’s new AI language model.

Notable Quote

“In the markets where we launched Apple Intelligence, performance has outperformed those where we didn’t,” Apple CEO Tim Cook stated during the earnings call. He described the success in AI markets as a “positive indicator” for future iPhone sales. Cook also highlighted that Apple’s AI-enabled operating systems are expanding in key markets like China and India, fueling optimism for future growth. Following his comments, Apple’s shares rose 3% in after-hours trading.

Context

Apple’s results were released just a day after three other major US tech companies—Microsoft, Meta, and Tesla—revealed their earnings, sparking mixed reactions from investors. Microsoft shares dropped 6% after missing expectations for its Azure cloud business, marking its biggest daily fall since 2022. Meanwhile, Meta and Tesla shares rose about 2% after Meta exceeded revenue and profit forecasts, and Tesla outlined promising plans for future models despite missing analysts’ expectations.

Challenges Ahead

The mixed results stem from concerns highlighted by JPMorgan analysts, led by Samik Chatterjee. The analysts identified three key challenges impacting Apple: declining iPhone market share in China, slow adoption of AI features in iPhones, and currency risks tied to a stronger US dollar, which increases the cost of Apple products abroad. China, which accounts for 17% of Apple’s revenue in fiscal 2024, continues to be a pivotal market for the tech giant.

The Decline Of Smartwatches: A Turning Point In The Wearable Tech Industry

by THEFUTURE.TEAM

March 13, 2025

For the first time in history, the smartwatch market is facing a significant downturn. Shipments are expected to drop by 7% in 2024, marking a major shift in a segment that has been growing steadily for over a decade. A report by Counterpoint reveals that while Apple still holds the top spot, its dominance is being challenged by a surge from Chinese brands like Huawei, Xiaomi, and BBK. Even as the overall market struggles, some companies are thriving.

The Big Picture: Why Smartwatches Are Slowing Down

Apple’s flagship products have long been the driving force in the smartwatch market, but even the tech giant is feeling the pressure. The company’s shipments are projected to fall by 19% this year, though it will remain the market leader. Meanwhile, brands from China are capitalizing on the shift, with Huawei showing an impressive 35% growth in sales, driven by the booming domestic market and a broad range of offerings, including smartwatches for kids.

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Xiaomi, too, is experiencing remarkable success, with a staggering 135% increase in sales. In contrast, Samsung is seeing more modest growth, up 3%, thanks to its latest Galaxy Watch 7 and Galaxy Watch Ultra series.

While some companies are succeeding, the broader market is facing headwinds. The biggest factor behind the overall decline is the slowdown in India, where consumer demand for smartwatches has stagnated. The segment is suffering from a lack of innovation and fresh updates, leaving many consumers with little incentive to upgrade their devices. Add to that market saturation, and it’s clear why many users are content with their current models. The Chinese market, however, is bucking the trend, showing 6% growth in 2024.

A Glimpse Into The Future

Looking ahead, the smartwatch market may begin to recover in 2025, driven by the increasing integration of AI and advanced health monitoring tools. As these technologies evolve, the industry could see a resurgence in demand.

Huawei’s Remarkable Comeback

Huawei’s impressive performance in the smartwatch space signals a broader recovery for the company, which has been hit hard by US sanctions. Once the world’s largest smartphone maker, Huawei’s business was decimated when it lost access to advanced chips and Google’s Android operating system in 2019. But in China, Huawei has maintained its dominance, with its market share growing to 17% in 2024.

This resurgence was partly driven by the launch of the Mate 60 Pro, a smartphone featuring a 7-nanometer chip developed in China. Despite US sanctions, the device surprised many with its capabilities, a testament to China’s rising investment in domestic semiconductor production.

In February, Huawei also unveiled its Mate XT foldable smartphone, the world’s first device to fold in three directions. Running on HarmonyOS 4.2, Huawei’s proprietary operating system, the phone further demonstrates the company’s resilience and ability to innovate despite international challenges.

Huawei’s smartwatch offerings are also catching attention, particularly the Huawei Watch GT 5 Pro, which launched in September of last year. With a premium titanium alloy design, a high-resolution AMOLED display, and impressive health tracking features, the GT 5 Pro has become a standout in the market, available to both Android and iOS users.

A Brief History Of The Smartwatch Revolution

The smartwatch market has had its fair share of milestones, but the real breakthrough came in 2012 with the Pebble, a Kickstarter-funded project that raised over $10 million. Pebble introduced the world to smartphone integration, app downloads, and long battery life, becoming the first truly mass-market smartwatch.

In 2013, Samsung entered the game with the Galaxy Gear, marking its first attempt at wearable tech. But it was Apple’s entry in 2014 that truly set the industry on fire. The Apple Watch’s sleek design, integration with iOS, and emphasis on health and fitness catapulted it to the top of the market, establishing a standard that many other brands would try to follow.

By 2021, the smartwatch industry had grown to over $30 billion in revenue, with annual growth reaching 20%. Yet now, it finds itself at a crossroads, with innovation stagnating and market saturation taking a toll.