Apple Sees Mac, iPad Sales Plummet As iPhone, Services Grow
Tim Cook, Apple’s CEO, expects a ‘significant acceleration in the Mac space’ in the current quarter ending in December after personal computer sales fell by 34 percent in the previous three-month period.
Apple saw iPhone and services revenues grow in its fourth quarter, but those bright spots weren’t enough to offset a double-digit plummet in sales for Macs and iPads.
The Cupertino, Calif.-based company revealed the figures in the Thursday earnings report for its fourth quarter, which ended Sept. 30 with $89.5 billion, down 1 percent from a year ago.
That revenue figure was slightly above Wall Steet’s expectations while Apple’s earnings per share of $1.46 surpassed analyst estimates by 7 cents.
Apple’s stock price was down more than 3 percent in after-hours trading.
The tech giant’s iPhone and services revenues grew 3 percent year-over-year to $43.8 billion and 16 percent year-over-year to $22.3 billion for the quarter, respectively. While iPhone sales marked a record for the quarter, services revenue marked an all-time high.
On an earnings call, Apple CEO Tim Cook said the iPhone sales growth was driven in part by the company’s new family of iPhone 15 devices that launched in September.
“Customers are loving the entire iPhone 15 family, and reviews have been off the charts,” he said.
By contrast, Apple saw revenues decrease across the rest of its product categories.
“During the September quarter, we continued to face an uneven macroeconomic environment, including foreign exchange headwinds,” Cook said.
Mac Sales Plummet, But Cook Expects ‘Significant Acceleration’ In Q1
Mac sales saw the biggest drop, decreasing 34 percent year-over-year to $7.6 billion.
Luca Maestri, Apple’s CFO, said this was driven by challenging market conditions.
Sales were also “compounded by a difficult compare to last year’s fourth quarter,” when the company experienced “significant pent-up demand” once factories reopened after shutting down for several weeks in the previous three-month period, according to the CFO.
Maestri also noted that Mac revenue was impacted by a different release schedule, with 2022’s MacBook Air launching in the fourth quarter and this year’s version arriving in the third quarter.
The first quarter of Apple’s next fiscal year, which ends in December, is a different story, however, with Cook expecting a “significant acceleration in the Mac space.”
iPad Sales Down 10 Percent, Wearables Revenue Down 3 Percent
Apple’s iPad revenue declined 10 percent year-over-year to $6.4 billion.
Maestri said iPad sales suffered for similar reasons to the Mac, with the “pent-up” demand from last year’s fourth quarter due to factories shut down in the previous period making for a difficult comparison.
“iPad continues to attract a large number of new customers to the installed base, with over half of the customers who purchase iPads during the quarter being new to the product,” he said.
Revenue for Apple’s wearables, smart home and accessories segment saw the smallest decline, decreasing 3 percent year-over-year to $9.3 billion.
“Apple Watch continues to expand its reach with nearly two thirds of customers purchasing an Apple watch during the quarter being new to the product,” Maestri said.
Starbucks Doubles Down On Apple Products
Maestri said business customers in developed and emerging markets “are expanding their deployment of Apple products and technologies to drive business innovation and employee satisfaction.”
As an example, the CFO said coffee retail giant Starbucks “continuously invests in Apple technology,” which includes using tens of thousand of iPads across all retail stores to help their teams streamline management, operations and training.”
“In addition, Starbucks recently refreshed over 10,000 Macs to the latest M2-powered MacBook Air for all store managers, enabling them to do the best work and improve productivity,” Maestri added.
Cook Doesn’t See Apple Relying On Other Chip Designers Again
With Apple’s full portfolio of Mac computers now moved from Intel CPUs to its custom M-series processors, an analyst asked if Cook would ever revisit the possibility of relying again on chip designs from semiconductor companies for any of its devices.
Cook said he doesn’t see Apple walking away from its custom chip design strategy.
“It’s really enabled us to build products that we could not build without doing it ourselves,” he said.
“I don’t see going back. I am happier than I was yesterday than I was last week that we made the transition that we’ve made, and I see the benefit every day of it,” Cook added.