Apple’s earnings beat analyst forecasts, but year-over-year sales fell for the third consecutive quarter. The results released yesterday cover the period from April to June, the third consecutive quarter in which Apple reported lower revenue than the previous year. This is the longest period of declining sales in nearly seven years. Revenues totaled $81.8 billion, a decrease of 1% from last year. Profit increased less than 1% from 2022 to $19.9 billion. Apple CFO Luca Maestri said the company expects the trend to continue in the next quarter.
L’iPhone cala
iPhone sales fell 2% from a year ago to $39.7 billion, below analyst forecasts. “We continue to face an uneven macroeconomic environment,” Apple CEO Tim Cook told investors on a conference call. The new model should be unveiled next month, at the moment there is talk of a possible launch on September 13th.
But the iPhone is doing better than the rest of the market in China. While overall smartphone sales fell by 8% in the second quarter, sales grew by “double digits”. “A possible result because we had a quarterly record of switchers on the iPhone, as well as having strong update activity,” explained Cook. “We also set quarterly records in China for both wearables, home and accessories, and services.”
The company’s wearables market, which includes Apple Watches and AirPods, had revenues of $8.28 billion, up from analyst estimates of $8.39 billion, according to data from Refinitiv. Mac and iPad sales were $6.84 billion and $5.79 billion, respectively; Cook also said the iPhone installed base hit a new high but didn’t provide numbers.
The services are still growing
The services segment, which includes Apple TV+, iCloud, Music and more, reported revenue of $21.21 billion. Cook said Apple now has one billion paying subscribers on its platforms, up from 975 million a quarter ago. Apple includes in this number any subscription made directly through the App Store and other proprietary services.
But the scenario could change, because requests are arriving from many quarters to allow apps and services to be used on apple products without going through the store, which generates commissions of 15% to 30% for the company. The battle over that issue will likely be settled in the US Supreme Court, but not until next year.
The future
According to investors and analysts, however, Apple’s prospects are excellent, despite the modest erosion of the company’s sales, especially if you compare Cupertino’s results with those of other hi-tech greats that have suffered steeper declines since the pandemic . Apple, on the other hand, has not only maintained its position, but has also laid the foundations for potential growth, presenting a $3,500 virtual reality headset a few months ago, which however will only be on sale from 2024 and at least for the first years is not expected to significantly affect the company’s revenues.
Apple’s AI
Tim Cook told Reuters in an interview that the increase in R&D spending is partly due to work on generative AI. “We have been researching a broad range of artificial intelligence technologies, including generative AI, for years. We will continue to invest, innovate and responsibly advance our products with these technologies to help enrich people’s lives,” he said. . Microsoft, Google and Meta who are spending billions on chatbots and other artificial intelligence technologies, while Apple has even avoided using this expression publicly, preferring to talk about “Machine Learning”. For Cook, AI will come to Cupertino products bringing new features. One of them, he said, will be the iPhone’s ability to transcribe voicemail messages in real time, starting with iOS 17 this fall.