The company reports its fourth consecutive quarter of revenue decline, but its shares have risen approximately 32.5% year-to-date
Apple recorded its fourth straight quarter of revenue decline, reporting $89.5 billion in revenue for the September quarter, a 1% drop from the preceding quarter. While the decline was anticipated, the total quarterly revenue surpassed Wall Street estimates of $89.28 billion. CEO Tim Cook noted record-breaking quarterly revenue in iPhone sales at $43.81 billion and services revenue at $22.3 billion for the same period.
Despite the anticipated sales decline, Apple’s stock saw a more than 2% increase ahead of the scheduled earnings call, and shares have experienced a 32.5% rise this year. The earnings report coincides with the company’s traditionally busy quarter, with the holiday season approaching. Investors are expected to seek information on the current quarter’s performance and the demand status for the recently launched iPhone 15, introduced just days before the quarter’s end. Mac revenue experienced a 34% year-over-year decline to $7.6 billion, and iPad revenue dropped by 10%.
We now have our most robust product lineup ever for the holiday season, featuring the iPhone 15 series and our inaugural carbon-neutral Apple Watch models—a significant milestone in our commitment to achieving carbon neutrality for all Apple products by 2030,” stated Cook.
Apple’s services revenue, seen as enhancing the value of the company’s hardware, has risen from $19.2 billion to $22.3 billion, reaching another all-time high, as per Cook. The company currently boasts 1 billion active subscriptions across its entire product range—twice the number from three years ago, according to the earnings call. Following last week’s announcement of price hikes on offerings like Apple TV+ and Apple News, analysts anticipate reaping the benefits of these adjustments in the next quarter (Apple TV+ has increased from $6.99 to $9.99 per month). Dipanjan Chaterjee, a principal analyst at Forrester, noted that the rapid growth in services “offset declines from the Mac and iPad lines of business.
This is positive because services create loyalty, generate recurring revenue, and offer much higher profit margins than products,” Chaterjee expressed in an emailed statement. “The recent across-the-board subscription revenue price increases will further bolster services revenue, although the impact will be evident in the next quarter.”
Beyond the US, Apple faces uncertainties in global markets. Despite expanding its retail presence, including the opening of its inaugural store in India in April and a new store in China this week, Apple’s quarterly revenue from China, totaling $15.5 billion, fell short of analysts’ expectations of $16.8 billion.
Julie Ask, Vice President Principal Analyst at Forrester, highlighted that consumers are more likely to purchase another Apple device if they are long-time users of its services.
The crucial figure is services revenue,” stated Ask. “Apple is engaged in a long-term strategy. Services enhance the value of hardware. More devices enhance the value of services. The more a consumer utilizes their devices and services, the better Apple comprehends the consumer and can function as a virtual assistant to them.