Apple, Inc. (NASDAQ: AAPL) has released its quarterly results for the fiscal Q1 2023, which ended on December 31, 2022. The Cupertino giant has failed to meet the analysts’ expectations, albeit it didn’t come as a surprise. Apple revenue in fiscal Q1 2023 declined 5.5% YoY to $117.15 billion, worldwide.
In the last 22 years, since 2001, it’s only the third time when Apple’s global revenue for the first quarter of the fiscal year declined year-over-year. First time it was in fiscal Q1 2001 and then the second time it was in fiscal Q1 2019 when Apple failed to record year-over-year growth.
The decline in Apple’s worldwide revenue in Q1 FY23 was largely due to a 7.7% YoY fall in its products (such as iPhone, Mac and others) revenue. However, the company was saved by the strong sales of iPad, indicating that large screen devices are still in high demand.
Another interesting finding of the report was the active installed base of Apple iPhones that has surpassed 2 billion mark. The milestone of one billion was achieved in January 2021.
Apple FY Q1 2023: Main Highlights
- Apple’s global revenue from iPhones declined 8.2% YoY in fiscal Q1 2023, to $65,775 million. iPhones continue to account for over 56% of Apple’s total revenue generated in a quarter.
- Surprisingly, the sales of Mac have plummeted dramatically during the holiday quarter. Apple’s global revenue from Mac devices declined a 28.7% YoY to $7,735 million during fiscal Q1 2023.
- In FY Q1 2023, the Cupertino giant generated approximately 11.5% of its total revenue from the Wearables, Home and Accessories segment. This segment includes AirPods, Apple TV, Apple Watch, Beats products, HomePod mini and accessories. Apple’s revenue from Wearables, Home and Accessories also slumped 8.3% YoY to $13,482 million during the quarter.
- The revenue from iPad and services business skyrocketed during the holiday quarter. Apple iPad revenue soared 29.6% YoY in FY Q1 2023, to $9,396 million, worldwide. This is the highest revenue since fiscal Q1 2014 when company generated $11,468 million in revenue from iPad sales.
- Apple services revenue reached an all-time high of $20,766 million during fiscal Q1 2023, representing 6.4% YoY growth. Apple’s services business, which include advertising, AppleCare, cloud, digital content, payment and other services, accounted for 17.7% of the company’s total revenue during the quarter.
- Apple’s net profit declined 13.7% YoY in FYQ1 2023, to $29,998 million.
Apple global revenue in FY Q1 2023: Declined across all major markets
The Cupertino giant witnessed a considerable YoY slump in every region during the first fiscal quarter of 2023, owing primarily to lower sales of iPhone and Mac.
- Apple revenue from Americas declined 4% YoY to $49,278 million in FY Q1 2023. The region accounted for 42% of the company’s global revenue during the quarter.
- Apple revenue from Europe and Greater China, both decreased 7% YoY during the first quarter of 2023. While Europe accounted for 23.6% of the company’s total revenue, China accounted for 20.4% of the company’s total revenue worldwide during the quarter.
- Japan and other APAC countries also reported 5% and 3% YoY declined, respectively, in the net sales of Apple during December quarter.
The global smartphone industry is going through a tough time. All OEMs have recorded a double-digit decline in their smartphone shipments in CY Q4 2022. Consumers are hesitant to make any unnecessary expensive purchases due to concerns about rising inflation, economic slowdown, impending recession, and other factors. Apple CEO Tim Cook also mentioned about the “challenging environment” in the press release.
The weakness in foreign currencies relative to the U.S. dollar was also one of the primary reasons for the declining sales of iPhone and Mac in Europe and APAC regions.
Furthermore, the Covid-19 pandemic continues to haunt Apple in terms of iPhone and other devices’ shipments. The iPhone 14 Pro and iPhone 14 Pro Max assembly facility in Zhengzhou, China, significantly reduced capacity in fiscal Q1 2023, resulting in supply shortages for Apple’s outsourcing partners, component suppliers, and logistical service providers.