LOS ANGELES – Apple, already facing a slowdown in China, warned that revenue in the holiday quarter will be about the same as 2022, signalling that investors will not see the growth rebound they were banking on.

Though iPhone revenue is expected to increase in the December quarter, overall sales will be similar to the year-earlier period, chief financial officer Luca Maestri said on a conference call on Thursday following Apple’s quarterly report.

The tepid outlook sent Apple shares down as much as 4.6 per cent in after-hours trading on Thursday.

They had closed at US$177.57 in New York, leaving them up 37 per cent in 2023.

Wall Street had projected revenue growth of about 5 per cent in the quarter, which is invariably Apple’s biggest sales period of the year.

Revenue from the iPad and the company’s wearables category, which includes its smartwatch line, will drop significantly during the quarter, Apple said.

The Mac, on the other hand, will see an acceleration.

The company has been trying to pull out of its longest sales slowdown in decades.

It just reported its fourth straight revenue decline, matching a streak it suffered in 2001, as the company struggles with a sluggish computer market and shaky demand in China.

Revenue fell to US$89.5 billion (S$122 billion) in the fiscal fourth quarter, which ended on Sept 30.

That compared with an average Wall Street estimate of US$89.4 billion.

Apple did not provide formal guidance for the current quarter, sticking with a policy it adopted during the pandemic.

The results suggest that Apple is facing a deceleration in China.

The government there has imposed bans on US technology in some workplaces, and a new phone from Huawei Technologies is providing fresh competition.

Revenue from that region amounted to US$15.1 billion in the last quarter, down slightly from a year earlier and well short of the US$17 billion that some analysts had predicted.

Chief executive Tim Cook said the decline was due to a drop in Mac and iPad sales, as well as currency fluctuations.

Even with the challenges, the iPhone performed slightly better than projected.

It generated US$43.8 billion in sales, compared with an average estimate of US$43.7 billion.

And, despite the concerns, the device reached a quarterly revenue record in mainland China, Mr Cook said during the conference call with analysts.

Apple’s earnings came in at US$1.46 a share in the last quarter, topping the US$1.39 forecast.

Mr Cook also said the company was investing “quite a bit” in generative artificial intelligence.

Bloomberg News recently reported that Apple is planning to inject the technology into several new apps and services in 2024.

“You will see product advancements over time,” Mr Cook said, “where those technologies are at the heart of them.”

The iPhone accounts for roughly half of Apple’s sales, so the launch of a new model is closely watched by investors.

With the iPhone 15, the company redesigned the high-end versions – giving them titanium cases – and added features such as a more powerful zoom camera lens.

The hope was to entice smartphone shoppers who had been holding on to their old models for longer.

Apple had a favourable year-over-year comparison in this cycle because 2022’s iPhone 14 Pro models faced supply constraints due to shutdowns at Apple’s manufacturing partners in China.

The iPhone 15 Pro had no such limitations.

Thursday’s report follows an upbeat view from Qualcomm, the leading maker of smartphone chips.

On Wednesday, it forecast stronger sales for the current quarter than analysts expected, kicking off a rally for its stock.

In one potentially ominous sign, Qualcomm said that its smartphone chip business saw a 35 per cent increase from Chinese manufacturers of Android phones, suggesting that customers in the region are opting for non-iPhones in larger numbers.

The area is Apple’s largest international market, accounting for about a fifth of sales.

Still, Mr Cook said he believes Apple actually gained smartphone market share in China during the quarter.

The company said the iPhone set revenue records in several developed and emerging markets, including India.

The personal computer market also is poised for a resurgence, but Apple did not debut any new models during the quarter.

Though it unveiled new MacBook Pros, iMacs and M3 processors earlier this week, sales of those machines will not show up in Apple results until the quarter ending in December. BLOOMBERG