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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Apple’s revenue increased 5 per cent in the three months to the end of June, as earnings from its services business and a surge in iPad purchases offset a decline in iPhone sales and a continued slowdown in China.

Total net sales rose to $85.8bn from $81.8bn in the second quarter of 2023, beating analysts’ expectations for $84.5bn. Net income rose 8 per cent to $21.4bn from $19.9bn, while earnings per share were up 11 per cent year on year to $1.40 versus the consensus estimate for $1.35.

Shares flipped between small gains and losses in after-hours trading on Thursday. Apple has risen 18 per cent this year and is the most valuable company in the world with a market capitalisation of $3.3tn.

Blemishing the quarter, revenue for the closely watched greater China region declined again, falling 7 per cent to $14.7bn from $15.8bn a year earlier, as Apple continues to face competitive pressure from local handset makers and a ban from governmental use.

While acknowledging the challenges faced in the country amid US-China geopolitical tensions, chief financial officer Luca Maestri said that on a constant currency basis the fall in sales was only 3 per cent and the rate of decline was slowing.

More encouraging was Apple’s services business — which includes the App Store, Apple Pay and the TV+ streaming platform — which continued to accelerate, rising to $24.2bn from $21.bn a year ago.

Revenue from its flagship iPhone was $39.3bn, down slightly from $39.7bn a year ago. This was offset by a 24 per cent jump in iPad sales to $7.2bn, driven by the release in May of a series of new models with more powerful chips and larger screens.

“[The] focus will be on underlying demand across various product categories, especially iPhones given concerns around overall smartphone market and China competition,” said Citigroup analyst Atif Malik.

Apple is bullish at the prospect of many customers upgrading to the newest iPhone models to gain access to new artificial intelligence features. With the iPhone 16 expected to launch in September, investors are watching closely for signs of how quickly the anticipated AI boost will start to show.

Apple announced the new features, known as “Apple Intelligence”, at its developer conference in June. A beta version of the AI-enhanced iPhone operating system, iOS 18.1, became available to developers this week. A deal with OpenAI will also give Apple users free access to ChatGPT, and Apple has explored partnerships with other big model providers such as Google.

“The Apple intelligence rollout will provide something that we think is relevant for users and another compelling reason to upgrade,” Maestri said.

Research and development expenses rose 8 per cent to $8bn in the quarter. Maestri declined to comment on how much of this was spent on AI, including the infrastructure needed to train and run its own large language models. Apple plans to run those models on-device and in its own data centres, which it says will better protect users’ privacy and data.

“We have significantly increased our level of effort on AI over the course of the year,” Maestri said. “We redeployed engineering resources from other programmes to AI because we recognised the need and importance of this new tech.”

Last month Apple’s new mixed reality headset, the Vision Pro, launched for consumers in Europe, China, Hong Kong, Singapore, Japan and Australia.

Apple announced a dividend of 25 cents a share worth $3.7bn for the quarter, with total shareholder returns rising to $32bn when buybacks were included.

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On a three-day campaign swing through Nevada and Arizona, Republican vice presidential candidate JD Vance repeatedly pinned what he considers the border security failures of the Biden administration on Vice President Harris.

Starting in Henderson, Nev., on Tuesday and culminating in a brief tour of the border in Cochise County, Ariz., this morning, Vance repeatedly accused Harris of being at fault for record-setting numbers of border crossings earlier in the Biden administration.

“Kamala Harris owns every failure of the Biden administration over the last four years,” Vance told a crowd at Liberty High School in Henderson.

President Biden asked Harris to find ways to address the root causes of migration from Northern Triangle countries early on in her time as vice president. Republicans seized on that, calling her a “border czar” who did little to stop the recurring surges.

Vance hammered his a line of attack again at a rally in the west valley suburbs of Phoenix last night, and once more while standing alongside the border wall south of Sierra Vista, Ariz., where he met with border patrol officials and the Cochise County Sheriff’s Office.

“It’s hard to believe until you see with your own eyes, just how bad the policies of the Kamala Harris administration have been when it comes to the southern border,” Vance said Thursday morning.

Vance employed that particular phrase — the “Harris administration” — repeatedly Thursday, as the Trump campaign moves to put Harris in the spotlight now that she’s the leading candidate for the Democratic presidential nomination.

Alongside Paul Perez, the president of the Border Patrol union, Vance vowed to reimplement deportations and other Trump-era immigration policies, like “Remain in Mexico.” Vance also touted Trump’s promise to resume construction of the border wall, pointing to abandoned materials along the U.S. side of the fence in Cochise County.

Vance said border patrol agents are “enraged” at the Biden administration because, Vance claimed, they “won’t let them do their jobs.”

“This can be stopped,” Perez added. “There is a playbook. President Trump had it. And he still has it. They can make it happen.”

Immigration is considered a winning issue for Republicans, particularly in border communities like those in Cochise County — and the Trump campaign hopes it carries weight in swing states like Arizona and Nevada.

Just ahead of Vance’s visit to the border Thursday, three Arizona border officials who endorsed Harris slammed Republicans for sidelining a bipartisan border deal earlier this year after Trump lobbied lawmakers to kill it. Biden had said he would sign that bill, and Harris vowed to do the same if elected.

One of the officials — Cochise County Supervisor Ann English — said that Trump and Republicans “continue to stand in the way” of action to secure the border. “That’s not fair to Arizonans,” she said. “Vice President Kamala Harris understands our border communities and is dedicated to partnering with state and local officials to solve our broken border crisis.”

She also has sought to blunt criticisms of the Biden administration’s handling of the border by reminding people of her roots as a prosecutor. Before she was elected vice president, and before that, a U.S. senator, Harris served as the California attorney general.

The first trip Harris took as attorney general when she took office in 2011 was a tour of a drug-smuggling tunnel along the California-Mexico border in Imperial County. At a rally earlier this week in Georgia, Harris cast herself as a hard-charging prosecutor who went after transnational gangs and drug cartels.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Russia, the US and a series of other countries exchanged 26 prisoners including the Wall Street Journal reporter Evan Gershkovich on Thursday in the largest swap since the cold war, according to Turkish security officials.

Thursday’s exchange in Ankara involving seven countries was the culmination of many months of painstaking diplomacy after president Vladimir Putin’s full-scale invasion of Ukraine plunged US-Russia relations to their lowest level in decades. The talks also drew in Germany, Norway, Poland, Slovenia, and Belarus.

Russia agreed to release 16 prisoners including Gershkovich, who had been convicted on spying charges, and Paul Whelan, a former US marine serving a sentence for espionage, as well as other individuals including prominent political prisoner Ilya Yashin, the Turkish officials said.

In return, a total of 10 people, including two children, were transferred to Russia, including Vadim Krasikov, a hitman convicted of a murder in broad daylight in Berlin in 2021, they said.

This is a developing story