Cook Says ‘Very Interesting’ A.I. Needs ‘Thoughtful’ Approach As Apple Beats

Apple is taking a “thoughtful” approach when it comes to “weaving” A.I. into its products.

That’s according to Tim Cook, who was “pleased to report” record high services revenue and a March quarter record for iPhone sales on Thursday afternoon.

The company’s results were almost an afterthought — or as much of an afterthought as Apple results can be. Cook’s mega-cap compatriots all delivered consensus-topping quarters last week, so even if Apple had disappointed, it wouldn’t have much mattered.

But they didn’t. Disappoint, I mean. Revenue of $94.84 billion was a solid beat ($2 billion ahead of the Street), even as it did mark a second consecutive decline. EPS was flat YoY, but $1.52 beat by a dime.

Cook cited a “challenging macroeconomic environment.” For the current quarter, revenue will probably fall by the same amount, Apple said on the call.

iPhone sales of $51.3 billion beat comfortably, although growth was slow — less than 2% compared to the same period in 2022. iPad and Mac sales both fell sharply, but the declines were expected. The hodgepodge of offerings included in home and wearables brought in $8.76 billion, more than analysts projected.

While Cook was keen to tout a new high mark for services revenue, $20.91 billion across Apple Music, iCloud, TV+ and the App Store was a slight miss. And yet, services stood out as the sole business line to record respectable YoY top-line growth.

Apple raised its quarterly dividend and announced another $90 billion in buybacks. Luca Maestri was proud of the $23 billion the company returned to shareholders in fiscal Q2, and said the higher dividend and additional repurchases reflect “confidence in Apple’s future.”

At the risk of trivializing an earnings report from the most valuable company on Earth, this was a nonevent.

Commenting further on A.I., Cook noted that Apple already leverages it in some products and said the potential is “certainly very interesting.” “I do think it’s very important to be deliberative and thoughtful,” he added. “There [are] a number of issues that need to be sorted.”