Apple’s Revenue Increases 4 Percent Despite Slowing iPhone Sales

After Apple unveiled artificial intelligence features for iPhones last year, the company’s stock soared in anticipation that the new abilities would provide a jolt to a stale business. But a boom in sales hasn’t materialized.

On Thursday, the tech giant said it sold $69.14 billion worth of iPhones in its most recent quarter, a 0.8 percent decrease from a year earlier and 3.5 percent below the quarterly sales record it reported in early 2022. The company’s sales of apps and services, like Apple Music and Apple TV+, were up, helping to offset the modest performance of its iPhone business.

Apple’s quarterly revenue increased 4 percent to $124.3 billion during the three months that ended in December. Its profit rose 7 percent to $36.33 billion, rebounding from the previous quarter when it paid a multibillion-dollar fine to European regulators.

The results fell just short of Wall Street analysts’ expectations for $124.38 billion in sales but exceeded projections of $35.62 billion in profit. The company said it expected revenue to rise in the current quarter, which ends in March. Shares rose 3.5 percent in after-hours trading because of the company’s encouraging sales outlook.

Despite heavily promoting its new A.I. technology, Apple released an iPhone in September without its signature selling point: an A.I. system called Apple Intelligence. The A.I. features became available about a month later in the United States and eventually expanded to other English-speaking countries.

Apple hasn’t yet released Apple Intelligence in China, its second-most important market, weakening the iPhone’s appeal there. The company’s share of smartphone sales in China fell 2.4 percentage points last year to 15.5 percent, according to Counterpoint Research, a market research firm. Apple, which plans to make its A.I. offering available in additional languages in April, said sales in China fell 11 percent to $18.51 billion.