Apple (AAPL, Financial) continues to face challenges in its Greater China business segment. In its fourth quarter fiscal 2024 results, Apple reported a revenue of $94.93 billion, marking a 6.07% increase compared to the previous year. However, net profit fell by 35.81% to $14.736 billion.
The iPhone segment remained stable, generating $46.222 billion in revenue, up 5.52% year-over-year. However, Greater China saw a revenue decline for the second consecutive quarter, falling 0.3% to $15.033 billion.
The quarterly profit fell short of expectations, leading to a nearly 2% drop in Apple's stock post-trading. The decline in net profits was primarily attributed to a one-time tax payment of $10.2 billion due to a European Union fine.
By product category, combined sales for iPhones, computers, and wearables reached $69.96 billion, an increase of 4.1%, surpassing analyst predictions of $69.15 billion. iPhone revenue alone was $46.22 billion, exceeding expectations.
Other segments showed mixed results. Mac revenues were $7.74 billion, meeting expectations. iPad revenues were slightly below expectations. Wearables, home, and accessories pulled in $9.042 billion, while services revenue reached $24.97 billion, a 11.9% increase.
The iPhone showed strong demand in emerging markets, with the iPhone 16 series shipments hitting 54.5 million units, making it second globally. Analysts expect further growth with the expansion of Apple Intelligence.
Regionally, the only declining market was Greater China, where revenue fell short of Wall Street's expected $15.8 billion. Despite this, CEO Tim Cook expressed confidence in Apple's long-term growth potential in China, even as competition intensifies.
Counterpoint Research indicated a 20% increase in the iPhone 16 series during its initial weeks in China. However, Apple's overall smartphone sales in China dropped by 2% due to older models' decreasing popularity and rising competition from Huawei.
In the Chinese market, Apple re-entered the top five smartphone brands but experienced a 6% decline in shipments. Other brands like Vivo, Huawei, and Xiaomi saw growth during the same period.
Apple's performance is closely tied to its supply chain. Of the 50 Apple-related companies on the A-share market, 27 reported profit growth in the first three quarters, compared to 19 last year. The sector's overall profitability improved significantly, reaching 74.2 billion yuan.
