BREAKING

Apple revenues fall as company invests heavily in AI

By Al Mayadeen English
Source: News websites
4 Aug 2023 11:58

Apple CEO Tim Cook announces a significant investment in artificial intelligence (AI) as Apple shows falling revenues in Q3.

Apple CEO Tim Cook attends the GQ Global Creativity Awards at the Water Street Associates Building on Thursday, April 6, 2023, in New York. (AP)

Apple CEO Tim Cook stated on Thursday that the business would be investing extensively in artificial intelligence (AI) after the company reported its third straight quarter of falling revenues, the company's worst sales downturn since 2016.

Apple's revenue for the fiscal third quarter ended July 1 decreased 1.4% to $81.8 billion. The corporation earned $19.9 billion in earnings during the quarter, which was more than analysts predicted.

iPhone sales fell slightly short of analyst expectations but were offset by strong sales in the services segment, which includes Apple TV+, and sales in China, which increased 8% year over year. Following the results, Apple shares were flat in extended trade.

Apple CEO Tim Cook told Reuters that the increased R&D investment was driven in part by work on generative artificial intelligence, the same sector that is driving spending at Alphabet and Microsoft.

Cook said “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,” adding “Obviously, we’re investing a lot, and it is showing up in the R&D spending that you’re looking at.”

Apple has spent $22.61 billion on research & development so far this fiscal year, which is about $3.12 billion more than the prior year at this stage. The announcement came after Amazon announced earnings that exceeded Wall Street's forecasts.

On a related note, Amazon's sales growth accelerated in the second quarter. Sales grew 11% to $134.4 billion, exceeding analysts' expectations of $131.5 billion. The corporation recorded a $6.7 billion quarterly profit, about double what experts projected.

Amazon now anticipates an additional revenue increase this summer. It said its largest sales day ever was part of Prime Day, a marketing blitz for loyal customers last month.