Technology
Friday, November 3rd, 2023 2:18 pm EDT
Key Points
- Revenue Stagnation in Key Quarter: Apple indicated that investors should not expect revenue growth in the December quarter, despite this being a crucial time for the company. In the fiscal fourth-quarter earnings report, Apple reported a 1% decrease in revenue compared to the previous year, marking the fourth consecutive quarter of revenue shrinkage. This marks the first time Apple has experienced such a trend since before the launch of the iPhone in 2007.
- Challenges in Hardware Businesses: Apple’s CFO Luca Maestri highlighted continued weakness in Apple’s Mac, iPad, and Wearables businesses, despite a relatively positive outlook for iPhone sales. The Mac business is expected to improve from the previous quarter but still suggests a decline from the previous year. Both iPad and wearables businesses faced declines in the September quarter and are expected to experience further drops in the December quarter.
- Services Business as a Bright Spot: Apple’s services business, which includes App Store sales, online cloud storage, AppleCare warranties, advertising, licensing deals, and subscriptions like Apple Music, is expected to perform well during the holiday season. The company anticipates strong double-digit growth in the average revenue per week for its services business, following a 16% growth in the previous quarter. This could offset the challenges faced in its hardware businesses.
Apple’s fiscal fourth-quarter earnings report indicates that the company doesn’t expect revenue growth in the December quarter, a crucial time of the year for its business. While Apple beat analyst expectations and noted strong performance of the iPhone 15 compared to the previous model, revenue fell about 1% from a year ago, marking the fourth consecutive quarter of decline. This marks the first such period of contraction for Apple since before the launch of the iPhone in 2007.
Apple’s CFO Luca Maestri explained that the company expects the revenue for the current quarter to be “similar” to the previous year, despite the last year’s quarter having an extra week, which added about 7% to total revenue. Wall Street had higher expectations, with analysts projecting sales growth for the December quarter of about 5%. While iPhone sales are expected to see year-over-year growth, Apple’s other hardware businesses, such as Mac, iPad, and wearables, face challenges.
The Mac business is expected to improve from the previous quarter but still suggests a decline from the previous year. Both iPad and wearables businesses saw declines in the September quarter and are expected to face further drops in the December quarter. However, Apple’s services business, which includes the App Store, online cloud storage, AppleCare warranties, and subscriptions like Apple Music, is expected to perform well during the holiday season, with strong double-digit revenue growth.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/02/apple-lacks-clear-path-to-growth-this-holiday-season-after-shrinkage.html
