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Apple quarterly figures: iPhone 15 a hit, M2 Macs a slow seller

3.11.2023

Translation: machine translated

In the past three months, Apple made more profit than in the previous year. This was primarily due to Services and the iPhone. Sales fell in all other divisions.

Apple generated slightly less revenue in the last fiscal quarter (Q4 2023) than last year. It fell by one per cent, but exceeded analysts' expectations. Profit rose by 11 per cent despite the lower revenue.

An overview of the key figures (amounts in US dollars, previous year's quarter in brackets):

Profit: 22.96 billion (20.72 billion)
Earnings per share: 1.46 (1.29)
Total sales: 89.5 billion (90.15 billion)
iPhone: 43.81 billion (42.63 billion)
Mac: 7.61 billion (11.51 billion)
iPad: 6.44 billion (7.17 billion)
Wearables: 9.32 billion (9.65 billion)
Services: 22.31 billion (19.19 billion)

In the earnings call, CEO Tim Cook was optimistic about the important Christmas business. He also emphasised Apple's commitment to sustainability: "We are entering the Christmas season with the strongest product offering we have ever had. These include the iPhone 15 and our first carbon-neutral Apple Watches, an important milestone in our efforts to make all Apple products carbon-neutral by 2030."

iPhone and Services save the quarter

A closer look at the figures reveals three things in particular:

The iPhone 15 is selling well: Apple has never made as much money with the smartphone in the quarter of an iPhone launch as it did this year. This could be mainly due to the regular iPhone 15, which is a solid upgrade this year. With the Pro model, the marketing around the new titanium frame also seems to be working. According to Cook, there are still supply bottlenecks for the flagship model.
M2 Macs were slow sellers: The quarterly figures show how poorly the M2 Macs have sold: Mac sales slumped by 34 per cent in Q4 2023 compared to the previous year. The surprisingly early presentation of the new M3 Macs was probably no coincidence, but came deliberately shortly before the quarterly figures. Tim Cook tried to reassure investors with a positive outlook: "I believe the Mac will have a much better quarter in the December quarter. We have the M3 and new products." At the same time, however, he spoke of a "challenging" computer market.
The services division is growing and growing: Apple TV+, Apple Music, iCloud and co. are becoming increasingly important for the Californian company. Revenue from services rose by 16 per cent to an all-time record. This also includes the payments made by Google to remain the standard search engine in Safari. These alone are estimated at 19 billion per year - over a fifth of service revenue.

Apple's revenue streams are shifting

The developments continue a longer trend: the iPhone has been Apple's most important source of revenue for years, but is slowly stagnating. iPad sales are also stable, but are no longer increasing. Macs account for an ever smaller percentage of Apple's sales and are therefore becoming less important.

The opposite is true for services. They are becoming increasingly important for Apple. No wonder, because they are an economic perpetual motion machine. For example, once you subscribe to iCloud storage or Apple Music, you practically never get out again. The integration into Apple's ecosystem contributes to this.

For the long-term future, CEO Tim Cook has high hopes for augmented reality. Apple is planning to launch its first Vision Pro headset in early 2024.

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Apple Vision Pro: Augmented reality headset for 3500 dollars
by Samuel Buchmann

In the earnings call, Cook announced that the purchasing experience should be different from other devices: They will intentionally only release the Vision Pro in Apple Stores and offer demos, he said. "It will be a very different process than the normal grab-and-go." Online orders will be possible according to the website, but Apple could ask customers to come to the stores to customise the headset. This is necessary because the Vision Pro has different headbands and cushions.

Cover image: Shutterstock

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Samuel Buchmann

Senior Editor

Samuel.Buchmann@digitecgalaxus.ch

My fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.

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