For the third time this fiscal year Apple has set a record for its growing services business that includes iCloud, Apple Music, Apple Arcade, AppleCare, Apple Card, Apple TV+, and more. The company also eclipsed analysts’ expectations for revenue and EPS.
Hamza Shaban for Yahoo Finance:
Investors appeared to take the bad news more seriously than the good. Shares dropped nearly 5% on Friday to close at $181.99.
Services was among the key metrics that surpassed analysts’ expectations, coming in at more than $21 billion, up 8% from the year-ago period. Apple also beat expectations for overall revenue and earnings per share. The company touted its installed base of 2 billion active devices. But even those bright spots weren’t enough to satisfy the Street.
Some analysts brushed aside the instant market reaction and highlighted the company’s strengths. When compared to Android’s marked decline in sales, for instance, the relatively flat sales of iPhones look healthy, Oppenheimer analyst Martin Yang told Yahoo Finance Live. “The services story is going to be the long-term growth driver for Apple,” he said.
Wedbush analyst Dan Ives also emphasized the bright side. “The star of the show was Services revenue,” he said in a note on Friday. He added that services is set to accelerate to double-digit growth and “remains key to Apple’s overall re-rating and growth story.”
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3rd quarter in a row of declining YoY revenue. It’s fine to keep on milking the base for more services, great, probably a lot more room for growth there. But unless HW sales pick up, that only lasts for so long and the bottom line doesn’t grow.
Apple has done really well in a world-wide economic slump and inflation, but they need to pick up market share, take out their competition in new ways, and getter done.
Mac: I do believe the new MBA’s are a big move forward and this quarter was it’s launch so moving into fall and education sales, the new MBA should be a solid pickup for the Mac lineup overall. Get some M3’s MBP’s out there and that should also be a huge step forward.
iPads: This market never became what Apple thought it might. Without a great directory system like MacOS, it’s never going to take off, and continue to be a niche market for a lot of uses but still never a PC laptop volume product.
Vision: Pro is coming in 2024, and while it will launch slowly, this is the big pickup over time. From engineering, to architecture and art, gaming to 3D live events, it’s going pick up demand from a sliver of each high-end spending segment. Overall that’ll add up and as applications kick into higher gear in a few years, it’ll be a big growth vehicle by end of the decade.
Car: Apple needs to buy LUCID and take that awesome engine tech and jack it into whatever they are planning on delivering. Period.
pretty good post!
Lot’s of “Apple shoulds” here. The “muh market share” canard is tough to kill. They’re doing just fine, vacuuming up lifelong customers on a regular basis who buy new devices of various kinds annually, subscribe to services and become more and more entrenched in the ecosystem by the day.
NOTHING Apple does will please the fake market. The stock has to be periodically slammed for the money changers to load up again.
Slightly declining revenue and especially not selling enough iPhones obviously had to kill Apple’s stock value. What difference does it make that investors dumped their stock. It’s a good thing. Apple can repurchase far more shares at $181 than at $195. I’m glad Apple is able to repurchase as much stock as possible. Apple has all that money put aside, so at least let it be used to best advantage. I wouldn’t have cared if Apple dropped even lower in value. I don’t know how much of that $90B in repurchase cash is left, but as long as Apple is repurchasing shares, just use that money up. Apple will recover if the next quarter is better, so I’m not worried. I’m Apple long 20 years so this recent drop in value means nearly nothing to me. I don’t think it’s Apple’s fault if the economy is weak. I only wish that Apple had another revenue stream to make up for lost revenue when iPhone sales falter. All the other tech companies jumped on the A.I. bandwagon to get extra revenue and only Apple missed the boat.
Please explain how spending BILLIONS on stock buybacks helps Apple.
The slick googles are for an elite niche market at that price and I don’t see how computer images layered on reality won’t get old very quickly, also wearing them for extended periods of time. Contrast spending time day and night on your iPhone or laptop much easier and PRODUCTIVE. That said, high price will bring in niche billions yearly.
Its ten years, billions spent and still no Apple self driving vehicle while other companies are far ahead. Sure, Apple could surprise and leap to the head of the line overnight similar to iPhone launch. But I doubt it, too many issues and the supply chain of supply chains nightmare.
The recent iPhone price increase announcement seems to confirm the slowdown in sales, so up the price to partially compensate for declining revenue. I get it.
Apple will be fine. However, with a creative visionary CEO at the helm not a scared of wokesters, would indeed reach greater heights much faster. Elon, you available?…
Perception is everything and, for whatever reason, the M2 is perceived as “not good enough,” despite its incremental bump rivaling other chip makers for the last 10 years.
“Nanometers” is the new “MHz,” meaning if that number doesn’t change significantly, people aren’t happy.
Not perception when it comes to M2. As others have written here numerous times, check the speed comparisons with threadrippers and Nvidia cards, Intel is faster…FACT!