Apple profit ebbs as iPhone sales under pressure

Apple on Thursday said its quarterly profit ebbed but topped market forecasts as it announced an unprecedented $110 billion share buyback. The iPhone maker reported a profit of $23.6 billion on $90.8 billion in revenue in the first three months of this year.

"Given our confidence in Apple's future and the value we see in our stock, our Board has authorized an additional $110 billion for share repurchases," chief financial officer Luca Maestri said in the earnings release.

Shares were up nearly 6 percent to $183 in after-market trades, buoyed by the epic buyback program. Apple's chief executive Tim Cook said in an earnings release that the company took in a record high amount from digital goods and services sold to fans of the iPhone maker's gadgets. As expected, iPhone sales dropped, with pressure growing from China and increased competition from Huawei.

The Silicon Valley giant reported $45.7 billion in revenue from iPhone sales, its main money maker, versus $51.3 billion in the same period a year earlier, a ten percent drop.

Earnings figures showed that in the key Greater China market, iPhone sales shrank to $16.4 billion from $17.8 billion in a year-over-year comparison.

Tech giant Huawei recently reported that its first-quarter profits surged over fivefold year-on-year, as the US-sanctioned firm continues to bite into competitor Apple's sales.

"Apple's sales were subdued during the quarter as Huawei's comeback has directly impacted Apple in the premium segment," Counterpoint senior research analyst Ivan Lam said.

In another setback for the iPhone, Samsung regained its position as the top smartphone seller worldwide in the first quarter of this year, according to industry tracker International Data Corporation (IDC).

As competitive pressure mounts on the iPhone, the Silicon Valley tech giant continues a push to ramp up revenue from services and digital content sold to fans of its devices.

But that move faces a threat from regulators and app makers who accuse Apple of essentially having a monopoly due to its tight control of the App Store and gadget operating software.

The U.S. Department of Justice is suing Apple, accusing the company of illegally maintaining a monopoly for its iPhone by stifling competition and imposing exorbitant costs on consumers.

Apple said the suit was "wrong on the facts and the law, and we will vigorously defend against it." The EU is also probing whether Apple's App Store allows app developers to show consumers offers free of charge outside of app marketplaces.

Apple is also under pressure to keep up with the competition in incorporating artificial intelligence into its offerings.

Apple has said little about the technology, which rivals Google and Microsoft have been aggressively developing.

Meanwhile, the recently launched Vision Pro "spacial reality" headgear and a new MacBook Air laptop model are not likely to have "any impact at all on the company’s bottom line anytime soon," Forrester principal analyst Thomas Husson said in a note to investors.