On the face of it, Apple's first-quarter performance was unruffled. The Cupertino-based group reported revenues up 4% to $124.3 billion between October and December. Profits climbed 7.1% to $36.3 billion, a sign that margins remain solid. Investors seem to want to look on the bright side: the stock is up 4% on Wall Street.

To stop the analysis at this point would not be worthy of the content that MarketScreener's team of analysts is accustomed to providing, would it? Apple's figures reflect another truth, less visible in the company's press release. The Apple brand is experiencing major difficulties in China, its second-largest market behind the United States, and incidentally, its Achilles heel. And this is likely to continue, as in the short term it seems difficult for Apple to reverse the trend.

In China, sales have fallen by 11%. The Group is losing market share to local competitors: Vivo, Huawei and Xiaomi in the front line. It would be tempting to downplay these problems. All the more so when you're the world's leading company, with inordinate financial resources. But they do. But why? Because we now live in a world where artificial intelligence is essential to smartphones. Apple has certainly begun to deploy AI functionalities in many countries. The brand calls this "Apple Intelligence". But in China, regulations mean that the company has no choice but to offer an AI model provided by a local company. ChatGPT, which has been deployed as a default solution on products - failing to develop an in-house model - is not authorized in the country. As a result, consumers favor local brands that are just as technologically advanced, and which are undoubtedly more likely to further improve their products at the current stage of development. iPhone sales down 0.8% worldwide: it's easy to see why.

Apart from this major blot on the copyboard, the rest is quite satisfactory, and even a little above expectations. Mac computers and iPad tablets reported strong growth, at 15.5% and 15.2% respectively. Services (Apple Music, Apple TV+, AppleCare), which are the second biggest revenue item behind iPhones, are not in crisis: they are the only revenue line that has never yet experienced a decline. Sales rose by 13.9%. Lastly, connected accessories (Apple Watch, Airpods, home gadgets, etc.) fell by 1.7%.

Apple actually had a relatively good quarter. However, solutions will have to be found to recapture the freshness of yesteryear. The brand could implement measures such as extending trade-in options and interest-free payments.

For the time being, it's hard to imagine Apple's future with any precision. However, if the situation in China does not improve over the next few quarters, it's a safe bet that the company will gradually become an increasingly service-oriented group.