Apple's iPhone revenue reached a historic high in the fourth fiscal quarter, but other hardware products fell compared to the same period last year.
On the morning of November 3rd Beijing time, Apple released its financial results for the fourth quarter of the fiscal year 2023 (the third quarter of the natural year) as of September 30th, 2023. During the period, the operating revenue was 89.5 billion US dollars, a year-on-year decrease of 1%; The net profit was 22.956 billion US dollars, an increase of 11% year-on-year; Quarterly diluted earnings per share were $1.46, a year-on-year increase of 13%.
In the fourth fiscal quarter, Apple's revenue in Greater China was $15.084 billion, a year-on-year decrease of 2%. Apple's fourth quarter earnings per share and revenue exceeded Wall Street analysts' previous expectations, but its total revenue fell for the fourth consecutive quarter.
Due to the release of the new iPhone 15 series, iPhone revenue reached a new high in the fourth quarter, and Apple's service business also reached a historic high. However, all hardware businesses other than the iPhone business experienced a year-on-year decline, resulting in a more than 3% drop in its post market share price.
IPhone revenue hit a quarterly high, while other hardware revenue declined
Apple's revenue from the iPhone in the fourth quarter was $43.805 billion, compared to $42.626 billion in the same period last year, an increase of 2.7%, which basically met analysts' expectations and reached a new high in the fourth quarter.
According to a research report by third-party institution Canalys, the global smartphone market decreased by 1% in the third natural quarter of this year. Driven by the demand for new iPhone 15 products, Apple shipped 50 million units, with a market share of 17%, a decrease of 1% compared to the same period last year.
Apple CEO Tim Cook stated at the financial report meeting that the sales of the iPhone 15 model were better than those of the iPhone 14 model, but the supply of the iPhone 15 Pro and iPhone 15 Pro Max was limited, which affected Apple's total iPhone revenue.
At present, the iPhone 15 Pro and iPhone 15 Pro Max still face supply shortages, and Cook expressed confidence in achieving supply and demand balance later in the quarter.
However, except for the iPhone, Apple's other hardware products have all experienced a year-on-year decline this quarter. Among them, Mac's revenue was $7.614 billion, compared to $11.508 billion in the same period last year, which did not meet analysts' expectations. The revenue from the iPad was $6.443 billion, compared to $7.174 billion in the same period last year, exceeding analysts' expectations. The revenue from wearable devices, household products, and accessories was $9.322 billion, compared to $9.65 billion in the same period last year, which did not meet analysts' expectations.
For Mac not meeting expectations, Apple CFO Luca Maestri attributed it to two factors: one is excessive market competition, and the other is the release of suppressed sales last year, which led to excessive proportion data.
Cook also said, "I think there will be a significant improvement in the Mac business in the fourth quarter. We have launched the M3 series of chips and new Mac products equipped with this chip
However, Apple's revenue from services reached a historic high of $22.314 billion this quarter, compared to $19.188 billion in the same period last year, exceeding analysts' expectations.
Greater China revenue decreased by 2.5%
By region, except for the Americas market, which maintained year-on-year growth, Apple saw a year-on-year decline in all other regional markets this quarter.
Apple's revenue for its Americas division in the fourth quarter was $40.115 billion, compared to $39.808 billion in the same period last year.
The revenue of the European department was $22.463 billion, compared to $22.795 billion in the same period last year; The revenue of the Japanese department was $5.505 billion, compared to $5.7 billion in the same period last year; The revenue of other Asia Pacific regions was $6.331 billion, compared to $6.373 billion in the same period last year.
The revenue of Greater China was $15.084 billion, a decrease of 2.5% compared to $15.47 billion in the same period last year.
According to data tracking by market research firm Counterpoint, sales of iPhone 15 decreased by 4.5% compared to iPhone 14 within 17 days after its release.
The overall trend of China's smartphone market in the third quarter was not good. According to IDC data, the shipment volume of China's smartphone market in the third quarter of 2023 was about 67.05 million units, a year-on-year decrease of 6.3%.
However, Cook is very optimistic about the Chinese market. He said on the financial report conference call that he was "very optimistic" about Apple's long-term prospects in the Chinese market. The iPhone set a record in Chinese Mainland in the quarter of September, and the iPhone accounted for the top four best-selling phones in urban areas of China. I just went to China and the interaction with customers, employees, and the local community made me very excited.
Apple is investing heavily in generative AI plans
During the financial report conference call, Cook was asked about issues related to artificial intelligence (AI) and revealed some details. He said that if we carefully look at what Apple has done in AI and machine learning, as well as how Apple uses them, then these are essential "foundational technologies" for Apple to produce every product.
He cited AI as the core of the personal voice and real-time voice mailbox functions in iOS 17. A series of "life-saving" functions on watches and mobile phones, such as fall detection, car accident detection, and electrocardiogram on watches. Without AI, these functions cannot be implemented.
Behind these features are the use of artificial intelligence and machine learning, but we did not deliberately use the words' AI 'to promote them because we prefer to bring more valuable features from a consumer perspective in our promotion, "Cook said.
Cook also talked about the current hot trend of generative AI, saying that Apple has already started various work and is investing a considerable amount of funds. "We will do it responsibly, and over time, you will see progress in products centered around these technologies
Apple Chief Financial Officer Luca Maestri expects Apple's revenue to be close to last year in the latest holiday quarter. Wall Street expects Apple's revenue to increase by 4.97% to $122.98 billion in the latest quarter from October to December.