Apple leaned on demand for its brick-and-mortar retail outposts in international markets as well as growing sales for its laptops as the company's dominant product, the iPhone, posted a 10% decline in sales for the three months ended March 30.
The Cupertino, California-based company's stores were “vital during the quarter, CEO Tim Cook said during the company’s earnings call. Demonstrations of Apple Vision Pro —a wearable so-called spatial computer that blends digital content with the physical world — have been one of the key drivers in bringing consumers to retail locations.
Cook cited strong success for the company's new flagship outpost in Shanghai that opened last month and coincided with an increase in iPhone sales for mainland China, one of the few markets to see such an increase.
Cook attributed the decline in iPhone sales to outlying overperformance in the year-earlier quarter driven by supply chain interruptions. Total Apple product sales fell 4.3% to $9.1 billion in the quarter.
Mac products helped to offset iPhone sales declines, with laptops and computers bringing in $7.5 billion during the quarter, up 5% year-over-year. Artificial intelligence technology in the new MacBook Air drove demand for the product, according to Cook.
The company is bullish on the performance of its two stores in India that opened about a year ago and generated $2.2 billion in sales during the last fiscal year. Revenue gains for stores in India set a new March record, according to Cook.
“I see it as a very exciting market, and it is a focus for us," Cook said.
Apple counts 520 stores across 26 countries and plans to open 53 new locations by 2027, according to reports. Key markets eyed for expansion include Miami and London.
Apple will be competing within a tight United States retail market as it looks to expand. Demand for space has increased by 42 million square feet in the past 12 months and 200 million square feet since 2021, according to CoStar data. Availability is a challenge, especially for locations that require a large power source such as Apple stores, according to CoStar data.