Apple Sales Decline

Apple said sales fell for the fourth consecutive quarter, including a decline in China that came as the company faces a broad economic slowdown in the country and new competition from rival Huawei Technologies.

The Wall Street Journal reports the September quarter marks the fourth straight period in which Apple reported year-over-year declines in total revenue, the longest such slump in years. Apple sales were $89.5 billion, down less than 1% from the previous year and largely in line with analyst estimates, even as net income of about $23 billion exceeded expectations.

Despite a broad market decline in demand for smartphones, the Cupertino, Calif., company said its iPhone business advanced 2.8% to $43.8 billion, matching analysts expectations. The tech giant released four new phones in the iPhone 15 family in September, including models that featured titanium cases and better cameras.

The company’s business in China, its third largest market, shrank 2.5% to $15.1 billion, missing analyst estimates. In the country, Apple is facing a broad economic slowdown, stronger domestic competition and heightened government scrutiny.

During the quarter, Apple-rival Huawei made a comeback with a new high-end phone after being shut out of the market for years due to Western technology sanctions. The Chinese phone vendor released the Mate 60 Pro in September that is reportedly able to achieve 5G-like wireless speeds using homegrown technology.

For the three months that ended in September, Huawei smartphone sales grew 37% from a year earlier in China, while Apple’s iPhone shrank 10%, according to Counterpoint Research. Overall smartphone sales in China fell 3% in the period, said the research firm.

China recently ordered central government employees to not use iPhones or other foreign-branded phones for work, The Wall Street Journal reported in September.

The challenges in China have spooked Apple investors, sending shares down more than 10% since the company’s all-time high earlier in the summer. In late June, Apple became the world’s first corporation to close with a market value above $3 trillion.

In the midst of these hurdles, Apple Chief Executive Tim Cook (left) made a surprise, whirlwind trip to China in October, visiting a key supplier and meeting with senior Chinese officials.

Apple has been pushing consumers toward its pricier iPhone Pro models over the past few years to keep sales growth up even as smartphone shipments have slowed. But that growth strategy may be reaching its limits, with Apple having likely reached almost every potential Pro customer by now, analysts said.

In the quarter ended in September, U.S. smartphone shipments shrank 19% from the prior year, including an 11% decline for the iPhone, though that may be due in part to the iPhone 15 launching later in the month than the previous year’s model, according to Counterpoint Research.