Apple’s first quarter has felt more like an entire (bad) year

Apple’s first quarter has felt more like an entire (bad) year

Apple (AAPL) is in the midst of what you could generously call a “difficult” period. The company is contending with a high-profile antitrust battle with the Department of Justice, falling iPhone sales in China, and a regulatory investigation in the European Union. And those are just the headlines from the past week.

The company is also still facing a shortfall when it comes to generative AI capabilities. And while it’s widely expected to debut some kind of generative AI offering during its WWDC developer event on June 10, it’ll need to have quite an impressive showing if it’s going to catch up to its Big Tech rivals including Microsoft (MSFT) and Google (GOOG, GOOGL).

All of that is hurting Apple’s stock price. Shares of the iPhone maker have fallen more than 7% since the start of the year and are up just 6.25% over the last 12 months. Shares of Microsoft, meanwhile, are up 14% year to date and 49% over the last 12 months. Google? Shares of the search giant are up 9% year to date and 43% in the last 12 months.

Suffice it to say, Apple’s 2024 is not going well.

Apple’s China problem

Apple’s latest headache came Tuesday, when Bloomberg, citing Chinese government data, reported that iPhone shipments fell 33% year over year in the country in February.

China is Apple’s third-largest market behind North America and Europe. In 2023, the region accounted for $72.6 billion of Apple’s $383.3 billion in total revenue. That’s roughly 19% of the company’s sales.

And this isn’t exactly out of the blue. Earlier this month, Counterpoint Research reported that iPhone sales fell 24% year over year through the first six weeks of 2024 in the country. Overall smartphone unit sales in China declined 7% during the same period.

Apple has been aggressively expanding in China for years, but a resurgent Huawei and difficult economic conditions in the country are squeezing device sales. The company isn’t just sitting idly by, though. Last week, CEO Tim Cook flew to China for the opening of the company’s latest flagship store in Shanghai. He also attended the China Development Forum in Beijing and was expected to meet with Chinese President Xi Jinping.