In its financial report for the third quarter of 2024, technology giant Apple Inc. experienced a notable slowdown in revenue growth. This situation raises particular concerns regarding the decline in sales within the Greater China region, as well as the detrimental impact of European Union fines on the company's net profit.

Key Financial Data:

• Apple’s revenue for the third quarter reached $94.93 billion, reflecting a year-on-year increase of 6% and surpassing market expectations of $94.58 billion.
• The adjusted earnings per share (EPS) stood at $1.64, exceeding the market forecast of $1.60.
• Due to a one-time tax expense of $10.2 billion resulting from an EU ruling, net income experienced a significant decrease, amounting to $14.736 billion—a nearly 36% decline year-on-year—with diluted earnings per share of $0.97.
• Revenue from iPhones totaled $46.222 billion, exceeding analyst predictions of $45 billion and indicating a year-on-year growth of 5.5%. This segment accounted for 48.7% of total revenue.
• Sales of Macs and iPads reached $7.744 billion and $6.950 billion, respectively, demonstrating year-on-year growth; however, they fell short of expectations.
• Service revenue achieved an all-time high in the fourth quarter, totaling $24.97 billion, slightly below analyst expectations of $25.27 billion, with a year-on-year increase of 12%.

Decline in Greater China Sales:

• In the fourth quarter, Apple’s revenue in the Greater China region amounted to $15.033 billion, which was below analyst expectations of $15.8 billion and represented a decline of 0.34% from $15.084 billion in the same period last year, thereby marking it as the only region in Apple's global markets to experience a revenue decrease.
• This figure signifies the second consecutive quarter of revenue decline in the Greater China region; in the third quarter, sales had fallen by 6.5% year-on-year to $14.7 billion.

Despite achieving revenue growth in the third quarter, the decline in sales within Greater China and the imposition of EU fines have adversely affected Apple’s net profit. Furthermore, the subsequent drop in Apple’s stock price and conservative forecasts for future growth have intensified market concerns regarding the company’s overall performance. However, Apple’s performance in other global markets remains robust, particularly in Europe and India, where iPhone sales exhibited double-digit growth. CEO Tim Cook noted in a conference call that, despite the downturn in Greater China, the revenue decline at constant currency rates was less than 3%, suggesting that the company’s core business is, in fact, healthier than before. Additionally, Apple’s active installed device base reached an all-time high, providing a solid foundation for future growth in its services sector.

Moreover, Apple continues to witness strong sales in emerging markets, further propelling the expansion of the iPhone. According to a report from International Data Corporation (IDC), Apple has regained a position among the top five in the Chinese market, holding a 15.6% market share, buoyed by the launch of new annual products. As market incentives increase and the iPhone 16 series is introduced, demand is expected to gradually materialize in the future. Despite the current challenges, Apple demonstrates resilience in its business operations and maintains an optimistic outlook for future growth.

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