After the US stock market closed on February 1st local time, Apple Inc. (AAPL) (hereinafter referred to as "Apple") released its financial report for the first quarter of the 2024 fiscal year (Q4 2023). This quarter, Apple's revenue was $119.575 billion, a year-on-year increase of 2%. After four consecutive quarters of revenue decline, Apple has once again returned to the growth track; Net profit increased by 13% from 29.998 billion US dollars in the same period last year to 33.916 billion US dollars; Diluted earnings per share were $2.18, a year-on-year increase of 16%.
On the other hand, Apple's revenue from the Greater China region has fallen against the trend. The financial report shows that Apple's revenue in the Greater China region for this quarter was $20.8 billion, a 13% year-on-year decrease from $23.9 billion in the same period last year, and also lower than the market's expected $23.5 billion.
As of the close on February 1st local time, Apple closed at $186.86 per share, up 1.33%, with a total market value of approximately $2.9 trillion. But after the financial report was released, Apple fell 2.9% in after hours trading.
"This fiscal quarter, Apple's revenue growth was mainly driven by iPhone sales, and the revenue from its services business reached a historic high." Apple CEO Tim Cook also pointed out that some of the company's growth rates were actually "significantly accelerated" compared to the previous quarter, as the December quarter was one week less than the first quarter of last year, due to Apple's corporate calendar approach. According to financial report disclosure data, in the fourth quarter of 2023, Apple's net revenue from products was $96.458 billion, accounting for 80% of Apple's total revenue; The net revenue from services was $23.117 billion, an increase from $20.766 billion in the same period last year.
Specifically, in terms of products, the iPhone, which accounts for more than half of Apple's revenue, continues its previous growth trend. Driven by the iPhone 15 series products, revenue from the iPhone in this quarter was $69.702 billion, an increase of nearly 6% year-on-year from $65.775 billion in the same period last year, exceeding market expectations.
Mac is also showing a recovery trend, with revenue reaching $7.78 billion, a slight increase of 0.6% year-on-year. In contrast, its revenue fell 34% year-on-year in the previous fiscal quarter, which is basically consistent with the performance of the global personal computer market. According to data from Canalys, global PC market shipments increased by 3% year-on-year in the fourth quarter of 2023, ending seven consecutive quarters of decline.
Apple's other important product line, the iPad, saw a significant decline in revenue, with a revenue of $7.023 billion, a quarter decrease year-on-year; The revenue from wearable and household products and accessories has also declined, with a revenue of 11.953 billion US dollars, a year-on-year decrease of 11%. On the news side, 2023 has just passed and is a gap in the field of iPad products. Since its launch in 2010, Apple has not updated or iterated its iPad products for the first time throughout the year. According to Bloomberg reporter Mark Gurman, the 13 inch M3 MacBook Air and new iPad Pro are already in production and are expected to be launched around the end of March.
According to Apple's disclosed financial report data, among the top five markets, including the Americas, Europe, Greater China, Japan, and other Asia Pacific regions, only Greater China has shown a downward trend in revenue. With the release of the Huawei Mate 60 series and the recovery of its production capacity, Huawei is showing a rapid growth trend. According to a report by an analyst at Jefferies, an investment banking firm on Wall Street, iPhone sales in China decreased by 30% in the first week of 2024, compared to Huawei's 19.2% market share, returning to the top sales in the Chinese market.
Under pressure, Apple has officially lowered the price of its new iPhone on its official website for the first time in many years. On third-party e-commerce platforms, including Taobao, Apple's prices have plummeted, and the price of iPhone 15 128GB products has dropped to below 5000 yuan. Under the price reduction strategy, data from market research institutions such as IDC and Canalys shows that Apple maintained its first position in the fourth quarter of 2023. Speaking of the decline in sales in Greater China, Cook stated in a conference call that the decline in revenue in Greater China is not due to the loss of iPhone popularity. He pointed out, "Against the backdrop of a strong US dollar, the overall impact of a 13% year-on-year decline in Greater China on the company will become a median. In addition, the iPhone business performed exceptionally well in the fourth quarter of 2023, with us occupying four of the top six smartphone sales in Chinese cities."
In fact, setting aside Huawei as an old competitor, in the current AI wave sweeping through the mobile phone market, Apple has not yet produced a strong competitive product. Based on Canalys' analysis, by 2027, the shipment volume of smartphones with AI functionality will reach 45%. The top five smartphone manufacturers in the Chinese smartphone market have all increased their layout of end side large model products. OPPO and Rong Yao both launched their end side large model products in the beginning of 2024. At this performance meeting, Cook revealed that Apple is investing heavily in generative AI, and AI has become a key component in many of Apple's products, such as the voice function of iOS 17, which uses AI technology. However, we did not promote it in the words of AI. Apple has invested a lot of time and effort in AI, and the details of its AI work will be shared later this year.
According to previous reports by Mark Goodman, a large language model will be added to the upcoming iOS 18. Moreover, in the field of foldable phones, Apple has not taken any action. According to Reuters citing IDC analyst Nabila Popal, "In China, Apple is facing more competitive challenges, not only because of Huawei, but also because of foldable products, which are very popular and growing rapidly in China. As is well known, Apple does not have foldable devices yet."
On the other hand, the Vision Pro, which has high expectations from Apple, will not replace the iPhone as a new core revenue at this stage, but it does have high expectations from Apple. For example, when promoting Vision Pro, almost the same promotional video as the iPhone 4 was used back then. Apple has announced that over 600 applications and games specifically designed to leverage the features of Apple Vision Pro will be launched on February 2nd. Further improvements in the application and ecosystem will also allow more consumers to try this product.
According to a report by LatePost, multiple market agencies predict that Apple will only sell 500000 Vision Pro units this year, partly because they are expensive and partly because they cannot produce more. On the news side, the first users of Vision Pro were mainly technology bloggers rather than ordinary consumers.