And it's been confirmed that Apple's quarterly revenue was held back by falling sales of its iPhones and weakness in China.

But the company's stock was higher in extended trading after a huge share buyback announcement and dividend increase.

Our North America business correspondent Michelle Fleury has the details.

Apple faces a raft of challenges when it comes to its single most important product, the iPhone.

Sales dropped 10%.

Competition is getting stiffer.

Samsung, for example, took the lead in global sales for the first three months of the year.

As for Apple's third largest region, greater China, sales were down 8%.

However, that was better than expected and it went some way towards calming investors' fears that Apple is losing market share to Chinese phone maker Huawei.

During the quarter, Apple released its first new major product in years, the Vision Pro.

But the high-priced virtual reality headset is only selling in small numbers at the moment.

On the service side, well, that is the rare bright spot for the business.

Given the challenges that Apple faces right now, the company was keen to look ahead.

The tech giant, which hasn't released a new iPad since 2022, was scheduled to release a new model next week.

CEO Tim Cook said Apple has big plans to announce from an AI point of view during its iPad event.

That, as well as the company's annual developer conference in June, all spell some sort of big news on the AI front.

And the potential of that, as well as the announcement of the biggest share buyback in the company's history, appeared to satisfy investors.

The tech giant's share price rose on the news.

It certainly did.

Shares of Apple were already up 2% before the earnings report and then jumped 6% in after-hours training.

Let's discuss this now with Martin Bacadax, the London Bureau Chief of the Street.

So, Martin, the markets liked what they heard.

Yeah, they absolutely did.

I have to say, I think it's that share buyback that's driving the bulk of the movement that we're seeing after hours.

It's probably about 4% of the 6% increase we're seeing, and I'm sure that's the most important factor.

But nonetheless, I think the numbers were just not as bad as investors had feared, particularly in China, but also in other parts of the world as well.

And Apple has bought a lot of faith, I think, from investors over time, and they're willing to give them a little bit of wiggle room into May and then into June for that developers conference, when they will map out their AI strategy.

And that will ultimately be the most important component for the company going forward.

I want to discuss AI with you in a moment, Martin, but Microsoft is now the world's most valuable company, and Samsung, the top smartphone seller.

And I've been reading your writing.

So why do you still say Apple is the most important stock in the stock market still?

What about Nvidia, for example?

No, it's a great question, and I think, and there's been a lot of debate about it.

I think Nvidia has captured a zeitgeist over the past year or so with respect to its AI ambitions and its chip making.

But for the most part, Nvidia really only sells to a handful of companies, and they're mostly these megatech sort of Microsoft and Tesla and others.

Apple has its tentacles across the whole of the global supply chain from a technology point of view.

It also gives you a wonderful read on the consumer as well and his or her abilities to trade up to these expensive handsets.

And of course, there's a political dimension to Apple's not only profits, but revenues as well, given its presence in China and in other markets around the world.

It's a widely held stock.

It's in the major benchmarks, and it's one that we look to on almost a daily basis to understand the sort of the mood of the market, if you will.

So I'm still firmly convinced that Apple is the most important stock.

But there are companies that are absolutely giving it its head.

OK. I mean, it's got it's got a lot of fingers in lots of pies.

I'm going to refrain from asking you if it's bitten off more than it can chew.

But let's turn to the elephant in the room, which is its AI strategy.

We're looking at the iPhone 16 coming out, we're looking at its iOS 18 operating system, a lot resting on what it can bring to drive sales there and get people to change their phones.

They keep holding on to their iPhones for longer now.

They really do.

I think there's been a lack of sort of a compelling reason to upgrade in the last two or three cycles.

And that really has been a headwind for Apple sales.

But what we've seen with Samsung, for instance, is that they are noting a significant reason for upgrades that is linked to the AI capability.

Customers are telling them that that's a big reason why they're able to pay these ever higher prices because of what the functionality can bring and the way that it changes the dynamism of the phone itself.

So I think Apple, if they are able to do that, they will absolutely get a tailwind into this replacement cycle going into the autumn.

But of course, a lot is going to depend on what that functionality is.

Apple's not saying much, but what they are saying is that they're going to focus on data security and privacy.

That's worked very well for Apple in the past.

And given the concerns that many people have with regards to the way that they interact with AI and how that information will be used, I think Apple's probably striking the right note here.

Very interesting.

Martin Bakkadax from the Street, London Bureau Chief of the Street.

Thanks for joining us.