Apple has finally ended its four consecutive quarters of decline.
On February 2nd, Apple released its financial report for the first quarter of fiscal year 2024 (the fourth quarter of 2023), with a revenue of $119.6 billion, a year-on-year increase of 2%; The net profit was $33.916 billion, an increase of 13% compared to $29.998 billion in the same period last year.
Among them, Apple's revenue in the Greater China region in the first quarter was only $20.8 billion, a decrease of 13% compared to the same period last year's $23.9 billion, and far below Wall Street's expectation of $23.5 billion. Ivan Lam, Senior Analyst at Counterpoint Research, explained Apple's performance in China, stating that "the market is recovering, but Apple is facing a revival from Huawei in the high-end market, as well as competition from multiple Chinese OEM manufacturers on the iPhone 13 and iPhone 14.".
However, Apple CEO Tim Cook said, "The hot sales of the iPhone have driven revenue growth, and the revenue of our services business has also reached a historic high. We are pleased to announce that our active device installations have now exceeded 2.2 billion units."
IPhone drives Apple's revenue to return to growth track
Specifically, in terms of business segments, iPhone remains the revenue driver. In the first quarter, iPhone revenue was $69.7 billion, a year-on-year increase of nearly 6%.
In mid January, the latest data released by Canalys showed that the global smartphone market grew by 8% in the fourth quarter of 2023, reaching 320 million units. In terms of manufacturers, after the launch of the new iPhone, Apple led the world with a market share of 24% in the fourth quarter of 2023; Samsung ranks second with a market share of 17%. Throughout the year 2023, Apple slightly surpassed Samsung for the first time, becoming the manufacturer with the highest shipment volume in 2023.
When commenting on Apple's performance in 2023, Jeff Fieldhack, Research Director at Counterpoint Research, pointed out that "Apple has replaced Samsung as the largest shipper for the first time in a whole year. The United States has contributed the most to Apple's growth, offsetting the challenges that Apple may face in China (Huawei's recovery)." . With a 2% increase in sales revenue, it can be seen as a revenue super cycle, supported by the stickiness of the Apple ecosystem and the trend of premium, with annual revenue exceeding $200 billion
In terms of hardware other than the iPhone, Mac revenue reached $7.7 billion in the first quarter, a year-on-year increase of 0.6% and slightly higher than expected. However, the iPad business still performed weakly, reaching $7.02 billion, a 25% decrease from the same period last year; The sales revenue of wearable, home furnishings, and accessories business was 11.95 billion US dollars, a decrease of 11% compared to the same period last year. Recently, due to a patent dispute with medical device manufacturer Masimo, Apple has suspended the sale of some watch products on its official website and stores.
In addition, Apple's service division's revenue reached $23.1 billion, an 11% increase from the same period last year. However, this is slightly lower than Wall Street's estimate of $23.4 billion. Cook attributes service growth to products such as advertising, cloud services, payments, and app stores. Apple has over 1 billion paid subscribers, including those who subscribe to applications through the App Store.
Apple CFO Luca Maestri said, "In this quarter, we generated nearly $40 billion in operating cash flow and returned nearly $27 billion to shareholders. We are confident in the future and will continue to make significant investments in various businesses to support our long-term growth plans."
13% decrease in Greater China
By region, Apple's first quarter saw year-on-year growth in all regional markets except for Greater China.
Among them, sales from the Greater China region amounted to 20.819 billion US dollars, a year-on-year decrease of 13%.
In recent years, the smartphone market has encountered a "cold winter". In order to increase market share and product sales, Apple personally participated in the "Double 11" promotion in China for the first time in 2023. Just over a month after the release of the iPhone 15 series, Apple's official channels began to lower prices, even more than in 2022.
Luca Maestri stated that although she is not satisfied with her current performance in China, the company is still optimistic about the Chinese market in the long run, believing that there are huge opportunities here.
However, the latest research report by Guo Minggui, a well-known Apple analyst at Tianfeng Securities, is pessimistic about the future sales performance of iPhones. "Apple has lowered its forecast for upstream key semiconductor components' iPhone shipments in 2024 to 200 million units (a 15% year-on-year decline). Among major global smartphone brands in 2024, Apple may have the largest decline." He also stated that in China, Apple's weekly shipments have declined by 30% to 40% year-on-year in the past few weeks, and this decline trend will continue. This is mainly due to Huawei's return and the fact that foldable phones have gradually become the preferred choice for high-end users in the Chinese market.
Outside of Greater China, Apple's largest market in the Americas had a first quarter revenue of $50.43 billion, a year-on-year increase of 2.3%; The revenue of the second largest market in Europe was 30.4 billion US dollars, an increase of 9.8% year-on-year; Japan's revenue was 7.77 billion US dollars, a year-on-year increase of 15%; Revenue from other Asia Pacific regions reached $10.16 billion, a year-on-year increase of 6.6%.
In addition, Cook also talked about the current hot topic of Generative Artificial Intelligence (AIGC), stating that Apple has invested enormous time and effort in promoting its development in the field of artificial intelligence, and specific details will be announced later this year.