Apple beats profit forecasts despite iPhone sales decline

Separately, Amazon reported a boost from its Prime Day sales event, but chipmaker Qualcomm shares ended 8% lower on Thursday night on tepid sales outlook 

Apple chief executive Tim Cook speaks during Apple's Worldwide Developers Conference in June 

Apple has reported sales and profit that beat expectations despite a decline in iPhone sales, with its signature device's performance in China helping it navigate a global decline in the smartphone market.

Apple said sales for its financial third quarter fell 1.4% to $81.8bn (€74.7bn) that topped analyst expectations. However, iPhone sales slightly missed estimates, but were made up for by strong sales recastin the services segment that contains Apple TV+ and by sales in China. 

Apple chief executive Tim Cook said in an interview that the increased research spending was in part driven by work on generative artificial intelligence, or AI, the same field that is driving spending at other big technology companies. 

"We've been doing research across a wide range of AI technologies, including generative AI, for years. We're going to continue investing and innovating and responsibly advancing our products with these technologies to help enrich people's lives," Mr Cook said. 

Apple is in a delicate position, with its entrenched iPhone battling for share against Android rivals in a mature market, while its next big product - the Vision Pro mixed-reality headset announced in June - is not yet in the hands of consumers.

While Big Tech rivals including Microsoft and Google are spending billions on dueling chatbots and other AI technologies, Mr Cook said that AI would show up in Apple products as new features. One such feature, he said, will be the iPhone's ability to transcribe voice mail messages in real time, starting this autumn.

In the meantime, Apple appeared to outperform what has been the weakest smartphone market in China in almost a decade. "We also set quarterly records in China for both wearables, home and accessories, and services," Mr Cook said. He said the installed base of iPhones hit a new high but gave no numbers.

The company's wearables business, which includes the Apple Watch and AirPods, had revenue of $8.28bn. Mac and iPad sales were $6.84bn and $5.79bn, respectively. "Almost half of the Mac buyers during the quarter were new to the product, and we continue to see strong upgrader activity to Apple Silicon," Mr Cook told Reuters.

Separately, online sales giant Amazon forecast third-quarter revenue above expectations, boosted by its biggest Prime Day sale event in July that drew price-conscious consumers to its platform. The company's fortunes in particular have been tied to those of its cloud-computing division. Amazon Web Services, or AWS, has seen growth slowdown in recent quarters.

But there has been signs of weakness in parts of the tech industry. 

Shares in Qualcomm, the largest maker of smartphone processors, ended 8% lower on Thursday a day after giving a tepid sales forecast for the current quarter, indicating that demand for mobile devices remains weak. Qualcomm has a research facility in Cork.