Apple earnings report for fourth quarter of 2023, recorded revenue of $89.5 billion with 1% decline from earnings for the same quarter the previous year.
In Q4, 2022, Apple earnings report recorded $90.1 billion record revenue with 8% year-over-year growth.
Although Apple’s decline in revenue from the same quater in 2022 is significantly low, the company saw a decline in sales across major product lineups like iPhone, iPad and Mac. However, Service revenue hit $22.3 billion, an all-time revenue record.
Here is a comprehensive synopsis or overview of Apple earnings report Q4, 2023 from highest grossing product to the least successful.
In spite of drop in sales of products, Apple Service hit $22.3 billion, all-time revenue record
In the fourth quarter ended September 2023, sales of Apple products generated $67.1 billion and Services generated $22.3 billion. Product sales are down from $70.9 billion but Service sales are up from $19.1 billion in Q4, 2022.
Here are sales figures by category as stated in Apple earnings report Q4, 2023
Service revenue in Apple earnings report Q4, 2023
The most successful category in Q4, 2023 was Service which generated $22.3 billion revenue with significant growth from $19.1 billion in Q4, 2022.
Apple Services include:
- App Store
- iCloud
- Apple Card
- Apple One (bundle plan)
- Apple Music
- Apple TV+
- Apple Arcade
- Apple Fitness+
- Apple News+
- Apple Podcasts
- Apple Books
- AppleCare
A day after publishing its earning report, Apple anounced the discontinuation of the cheaper Apple Music Voice Plan. Available for $4.99, the afforable tier was introduced in late 2021 that gave access to Apple Music’s entire library of over 100 million songs through voice commands only.
Maybe limitations to not be able to download songs for offline listening, create playlists, or view lyrics were the reasons for its not attracting subscribers.
iPhone sales in Apple earnings report Q4, 2023
In spite of the launch of the new iPhone 15 and iPhone 15 Pro models, Apple saw a slight improvement in iPhone y-o-y sales. In Q4, 2023, iPhone generated $43.8 billion higher than $42.6 billion in Q4, 2022.
CEO Tim Cook explained that supply constraints of iPhone 15 Pro and iPhone 15 Pro Max models affected total iPhone revenue.
iPad sales in Apple earnings report Q4, 2023
Even without addition of a new upgrade in the lineup, iPad sales saw a slight decline in Q4, 2023. iPad sales revenue hit $6.4 billion in the fourth quarter of 2023 down from $7.1 billion in Q4, 2022.
The current iPad lineup is diverse and versatile catering to needs of students, professionals and everyday users.
- 12.9-inch iPad Pro (6th generation) starting $1099
- 11-inch iPad Pro (4th generation) starting at $799
- iPad Air 5 starting at $599
- iPad mini 6 starting at $499
- iPad 10 starting at $449
- iPad 9 starting at $329
Consumers can also purchase those iPad models discontinued by Apple like 12.9-inch iPad Pro (5th, 4th, 3rd gen), 11-inch iPad Pro (3rd or 2nd gen), or iPad mini 5/4 from Amazon, Best Buy or other third party retailers at discontinued prices.
Mac sales in Apple earnings report Q4, 2023
In Q4, 2023, Mac sales dropped to $7.6 billion from $11.5 billion in Q4, 2022.
In this fiscal year, Apple launched next-generation Mac mini with M2 and M2 Pro chips, 14-inch and 16-inch MacBook Pro with M2 Pro chip, 15-inch MacBook Air with M2, Mac Pro with M2 Ultra, Mac Studio with M2 Max and M2 Ultra.
Recently, the tech giant unveiled new 24-inch iMac with M3 and 14-inch and 16-inch MacBook Pro with M3, M3 Pro and M3 Max chips on October 30, 2023. However, those Macs are not included in Q4, 2023 sales as they are not available yet.
Wearables, Home and Accessories revenue in Apple earnings report Q4, 2023
Wearables, Home and Accessories revenue hit $9.3 billion in Q4, 2023 slightly down from $9.6 billion in Q4, 2022.
Apple’s Wearables, Home and Accessories category includes AirPods, Apple Watch, HomePod, HomePod mini, Apple TV 4K, smart home devices, and other accesorsies like cables, chargers, wallets, and battery packs.
In September, the tech giant introduced the Apple Watch Series 9, Apple Watch Ultra 2, and AirPods Pro 2 with (USB-C) charging case which are not necesarily attractive additions as offer limited new features like Double tap gesture in Apple Watch models and USB-C connector in AirPods Pro 2’s case.
Forecast for Apple earnings report for Q1, 2024, Holiday quarter, Vision Pro and generative AI
With a strong product lineup including the new iPhone 15 series, MacBook Pro with M3 family chips, iMac, Apple Watch Series 9 and Ultra 2, Apple expects that it will have a strong Q1, 2024 earnings.
For the Holiday quarter, starting from October and ending in December, Apple expects to hit the same revenue as it did the previous year for the same quarter, $117.2 billion. At the fourth quarter earnings’ call, Apple CFO Luca Maestri said:
As a reminder, the December quarter this year will last the usual 13 weeks, whereas the December quarter a year ago spanned 14 weeks. For clarity, revenue from the extra week last year added approximately 7 percentage points to the quarter’s total revenue. Despite having one less week this year, we expect our December quarter, total company revenue to be similar to last year. We expect iPhone revenue to grow year-over-year on an absolute basis. We also expect to grow after normalizing for both last year’s supply disruptions and the one extra week.
Dicussing the upcoming new product category, Vision Pro debuting in early 2024, CEO Tim Cook said that its launch and condumers education experience will not be the same as Apple Watch and AirPods.
“There’s never been a product like the Vision Pro, so we’re purposely bringing it out in our stores only so we can really put a great deal of attention on the last mile of it. We’ll be offering demos in the stores and it’ll be a very different process than a normal grab-and-go kind of process.”
Sheding slight color on monetization of generative AI tech, Cook said that the company was investing quiet a bit in artifical intellience and consumers can expect product advancments with generation AI.
