Apple suffers fourth consecutive quarter of declining sales, beat Wall Street anyway

AppleInsider

Apple has reported its results for the fourth quarter of 2023, with its revenue of $89.5 billion a continued drop for four consecutive quarters.

Apple CEO Tim Cook

The last quarter of the fiscal year for Apple, the fourth quarter financial results were reported by Apple on Thursday, before its standard conference call with industry analysts.

For the fourth quarter, Apple managed $89.5 billion of revenue, down from the $90.1 billion reported in Q4 2022. The reported earnings per share was declared to be $1.46.

Apple's quarterly revenue and net profit as of Q4 2023

The iPhone revenue has gone from $42.6 billion in Q4 2022 to $43.8 billion in Q4 2023. Revenue from iPad is at $6.43, down from $7.17 billion in the year-ago quarter, while Mac revenue at $7.61 is down year-on-year from $11.5 billion.

The usually dependable Services arm saw its growth continue to $22.314 billion, up from $19.18 billion for Q4 2022, and Wearables, Home, and Accessories reached $9.32 billion, down year-on-year from $9.65 billion.

Apple quarterly revenue by unit

The fourth quarter would've been the first full quarter for sales from Apple's Q3 launches, including the M2 Max and M2 Ultra versions of the Mac Studio, the New Mac Pro with Apple Silicon, and the 15-inch MacBook Air.

Q4 period launches, including the iPhone 15 family of smartphones, the updated USB-C version of the AirPods Pro, USB-C EarPods, the Apple Watch Series 9, and Apple Watch Ultra 2 will have a small effect on the Q4 results. This is due to all of them being introduced in the last few weeks of the three-month period.

The next quarter, Q1 2024, will be the quarter that will benefit the most from Apple's annual iPhone update.

Apple's annual revenue, gross margin, and net income

In comments, Apple CEO Tim Cook said "Today Apple is pleased to report a September quarter revenue record for iPhone and an all-time revenue record in Services." He continued "We now have our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon neutral Apple Watch models, a major milestone in our efforts to make all Apple products carbon neutral by 2030."

"Our active installed base of devices has again reached a new all-time high across all products and all geographic segments, thanks to the strength of our ecosystem and unparalleled customer loyalty," added CFO Luca Maestri.

Apple also advised of its full-year results, with annual revenue of $383.3 billion down year-on-year from $394.3 billion.

Read on AppleInsider

jas99

Apple is doomed. 

CiaranF

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

StrangeDays

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

You’re price comparing to the top of the line model. You should compare to the base iPhone. 

pslice

jas99 said:

Apple is doomed. 

So said critics since the Mac came out. 

aderutter

StrangeDays said:

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

You’re price comparing to the top of the line model. You should compare to the base iPhone. 

And how much more tech do you get on todays devices? Fact is people want more & better and are prepared to pay for it. 

Even the iPhone SE is far beyond a 3GS, sure Apple could make a $200 phone if they wanted but that is not their market segment. 

Skeptical

I have to admit I’m Apple saturated and starting to really dislike the company. 

tyler82

This is actually good news for Apple's zero carbon 2030 goal. Less new products out there that are consuming resources to be built- the better. We need to get past this infinite growth mindset. It is completely unsustainable and unrealistic. We should be holding onto our tech for longer and reusing/ recycling products. Planned obsolescence has turned the USA into a manufacturing laughingstock.

eightzero

Tim seems to be skipping comment about that actor's guild strike and what plans they have to pay the people that made that (record breaking services) ATV+ content.

tipoo

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

I think this might be a bit circular. Wall Street's need for constant EPS growth means that with iPhone sales plateauing and most hardware lines staying steady, getting more profit per user is the only way to grow that EPS. Higher ASPs, higher margins, loop you into more services etc. 

canukstorm

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

So you're blaming Apple with respect to other smartphone OEM's raising their prices?  That's rich.  Do you also blame McDonald's for the obesity crisis?

mikethemartian

pslice said:

jas99 said:

Apple is doomed. 

So said critics since the Mac came out. 

Well they are reporting Mac revenue down 33% from the same quarter last year and it is only 1/3 the revenue for services.

discountopinion

This is actually a very good quarter. I am impressed.

The small decline in revenue was predominantly from iPad and Macs for which we are comparing Q 2022 that benefitted from M2 Mac launches and Q 2023 which did not. We saw new Macs just recently being announced. iPad refresh also has not happened yet in 2023. Best is yet to come.

Highest margin segments iPhone and Services grew. Home/Wearables was almost flat. This is a strong showing by Apple.

All of this to the backdrop of a killer macro economic climate and FX head winds. I mean the world is deep fried bananas.

The more I look at the numbers, the more confident I feel that Apple is riding the economic tectonic plates like a pro surfer. And this while investing heavily into new major product categories like Vision Pro.

Edited - The more I run the numbers in chatGPT data analysis the more I love this Q. Gross margin of services is up YoY (up ~0.5% points).  Services represent ~25% of total sales but is ~40% of total gross margin. (2022 numbers were 21.3% and 35.5%). Installed base keeps growing and gooses the services volume. Good times.

mikethemartian

So the only thing that beat the 4% inflation rate between September 2022 to September 2023 was services.

Pema

StrangeDays said:

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

You’re price comparing to the top of the line model. You should compare to the base iPhone. 

Why don't you buy a feature phone from Nokia. They still make them for £35. I don't believe a prestigious, high-quality iPhone 15 Pro is for you. Maybe you ought to give it to your kids, they may appreciate it. You should stick with what you can manage: a feature phone. 

Afarstar

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

Utter garbage. You’re clearly not taking advantage of Apple’s amazing eco system which works brilliantly for 99.9999% of users. Suggest you buy a cheap knock off. 

nrg2

You apparently have selective memory. The 3GS was only at that price WITH CARRIER SUBSIDIES. The actual purchase price was $700 (US) for a 32GB model. (BTW $1000+ adjusted for inflation.) With the subsidies the carrier made you pay the $200+ upfront to walk out the door. That model changed by carrier demands, paying for the whole thing upfront or through a 24 or 36 month 0% interest offer.

My iPhone upgrade last year had the carrier promotion of $1000 off over the 36 months with trade in - so my 14 Pro Max with 256GB will only be about $300. 

Apple’s markup is hardly greedy. They average in the 25% profit margin range. The fact that other companies making consumer electronics and computers operate at razor thin margins is only the fault of said companies. Those companies pooping out flimsy plastic garbage is precisely why I buy quality Apple products. 

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. 

saarek

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

I understand where you’re coming from, really, as a fellow Brit I do.

Having said that I think your argument, at least when it comes to the iPhones, is flawed.

In 2009 the exchange rate hovered around $1.55 to £1 & VAT (sales tax to our US friends) stood at 15%.

Today we are hammered by a mixture of a US Dollar that is arguably over-strong against international currencies, trading at around $1.25 to £1 for a while now and a much higher VAT rate of 20%.

You also need to consider that the Pro Models are effectively a new category. It’d be like everyone buying a MacBook Air and then Apple introduced a MacBook Pro.

It’s hard to get an exact price on the iPhone 3GS as back then it was all on contracts with a smaller amount upfront. Still, the base iPhone 3GS was $499 in the US, so we can use that.

Adjusted for inflation $499 would be $716 today. For a new iPhone 15 the cost is $799. Yes, Apple is making a bit more. Tim Cook is a greedy bastard, but then as CEO it’s his job to make as much money as possible and really you’re not paying that much more than you did back in 2009, at least not in dollar terms.

Yes, here in the U.K. we are worse off than 2009. But most of that is due to tax rises and a much stronger dollar and both of those items are outside of Apples control. 

I agree with you on the Apple One side though, Apple are taking the piss there with so many price rises.

torb9h

Why are you bothered about the prices if you don’t like the services? If you don’t like them, don’t pay ir. Simple. Honestly the whining for absolutely no reason.

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

danox

CiaranF said:

Maybe people are getting pissed off with your prices eh? Your actions on the market then drive up the prices of other smartphone manufacturers cos then they get greedy too. I remember buying my first iPhone 3GS for £299 or £349 back in 2009 or so. Now the same equivalent for me in a Pro Max model is circa £1400. That’s greed too, not inflation. 

Now you’ve also increased your  One subscription prices globally. Third time in 2-3 years too if you’re outside of the US.  TV is useless, you’ve to pay for most of the non  stuff.  Fitness+ bugs the life out of me cos they’re all on Prozac or something with those fake smiles. iCloud is rubbish compared to Googles offering but I need it. Not much use for Arcade either. 

Start listening to what your audience wants and will endure instead of telling them what they want or you’ll end up like Nokia. 

So your answer is cheap? Nokia’s downfall was making a worse product, Apple still makes the best smartphone, laptop, digital watch, a very good desktop computer aside from stacking on the GPUs, and the way their OS software works with their hardware is also still the best in class.

If we are in bad times, like some people keep saying the only thing Apple can do is what they are currently doing continue to make the best products and move on. I would also hope that more American companies (including Apple) would go down the path of Germany and Japan, and not the path that, the UK chose, which was not making anything in country, and guess what? that path probably will cost more.

danox

Skeptical said:

I have to admit I’m Apple saturated and starting to really dislike the company. 

I’m Dyson saturated, the first Dyson vacuum cleaner I bought still works very well over 15 years later and shows no signs of going away, it cost a lot at the time but it was worth it, I now have the wireless Dyson vacuum cleaner for upstairs and it also cost a lot and it looks like it’s not gonna go away anytime soon, the cliché that you get what you pay for is very true, and that definitely applies to Apple products too.