Apple's iPhone sales during the holiday season slipped despite a highly anticipated AI rollout

Core Insights - Apple's iPhone sales experienced a slight decline during the holiday season, indicating challenges in the company's efforts to integrate artificial intelligence into its products [1][8][9] Sales Performance - iPhone revenue saw a roughly 1% drop compared to the previous year's October-December period, attributed to the late arrival of AI features and limited availability in markets outside the U.S. [2][5] - Overall revenue for Apple increased by 4% year-over-year to $124.3 billion, with net earnings of $36.3 billion, or $2.40 per share, marking a 7% increase from the previous year [4][10] Market Dynamics - In China, Apple's total revenue fell to $18.5 billion, an 11% decrease from the previous year, reflecting a decline in market share as local competitors like Huawei and Xiaomi gained traction [5][6] - iPhone shipments in China dropped nearly 10% year-over-year, while local brands reported increases of over 20% [6] AI Integration Challenges - The anticipated boost from AI features has not yet materialized, leading to a reassessment of growth expectations for Apple [8][11] - Apple's stock price surged by 30% last year on hopes of AI-driven demand, but has since retreated by 5% as realization set in that demand may take longer to increase [9] Future Outlook - CEO Tim Cook expressed optimism about the product pipeline and forecasted revenue for the upcoming quarter to meet or exceed analyst projections, which may bolster investor confidence [10] - Apple's services division remains a strong revenue generator, with $26.3 billion in revenue, a 14% increase from the previous year, although its reliance on Google as the default search engine is under scrutiny [13]