Apple, Inc. (NASDAQ: AAPL) unveiled its financial results for its fiscal 2023 fourth quarter ended September 30, 2023. The report reveals a challenging landscape where the Cupertino giant reported either declining or minimal growth in its revenue across its major products and geographic regions. Apple global revenue declined 0.72% YoY in fiscal Q4 2023, to $89.5 billion. Notably, Q4 was the fourth consecutive quarter of declining revenue worldwide. However, on a quarterly basis, Apple’s revenue in Q4 FY23 increased an impressive 9.41%.
Despite slow revenue growth, Apple’s net profit surged an outstanding 10.79% YoY and 15.47% QoQ in Q4 FY23 to $22.96 billion.
Now, let’s delve into the segments and regions that played a pivotal role in Apple’s sluggish revenue growth throughout fiscal 2023.
Apple Revenue Q4 FY23
- iPhone Dominance: iPhone accounted for 48.9% of Apple’s overall global revenue during fiscal Q4 2023. The revenue from iPhone sales increased 2.77% YoY and an even more impressive 10.43% QoQ during the fourth quarter, to $43.81 billion worldwide. It’s worth noting that this represents the highest September quarter revenue from iPhones that Apple has ever achieved. Throughout fiscal 2023, Apple either reported less than 3% annual growth in iPhone revenue or no growth at all.
- Low Demand for Macbooks: Apple revenue from Mac declined a massive 33.84% YoY in Q4 FY23, amounting to $7.61 billion. This marked the fourth consecutive quarter of yearly decline in Mac’s global revenue. However, on a quarterly basis, Apple recorded an impressive 11.32% growth in September quarter revenue from Mac devices. Despite this downturn, Mac devices still contributed significantly, accounting for about 8.51% of Apple’s total global revenue during Q4.
- iPad’s Ups and Downs: Apple’s revenue from iPad products followed a similar pattern, declining for the third consecutive quarter with a 10.19% YoY drop, resulting in $6.44 billion in Q4 FY23. However, there’s a positive twist on a quarterly basis, as the demand for iPads surged, leading to an 11.26% growth in revenue during the quarter.
- Services on the Rise: Apple’s services division has been on a consistent growth trajectory, achieving notable progress each quarter. The share of services has seen a remarkable increase, rising to 24.93% in FY Q4 2023 from 21.29% in FY Q4 2022. Apple’s revenue from services reached an all-time high of $22.31 billion during the September quarter of 2023, with 16.29% YoY and 5.19% QoQ growth.
“Our active installed base of devices has again reached a new all-time high across all products and all geographic segments, thanks to the strength of our ecosystem and unparalleled customer loyalty,” said Luca Maestri, Apple’s CFO.
Factors Contributing to Revenue Decline
Apple witnessed revenue declines or minimal growth across all major markets during the fourth quarter of fiscal 2023. This trend can be attributed to a global decrease in consumer demand for high-end electronic products, driven by economic uncertainties, recession, inflation, and workforce reductions at major tech companies, among other factors.
Apple is heavily reliant on the Americas region, which accounted for 44.82% of its total revenue in Q4 FY23. However, the region recorded a negligible growth of 0.77% YoY in revenue during the quarter. Disappointingly, other regions didn’t perform any better, as they reported no revenue growth. Apple’s revenue from Europe, Greater China, and the rest of the Asia-Pacific (APAC) declined by 1.46% YoY, 2.50% YoY, and 0.66% YoY, respectively.
Apple’s stagnant or declining revenue from iPhone sales has been a growing concern for the tech giant. This is despite the fact that the company is getting a positive response from India, which recently became the 5th largest country for iPhone sales in the world. During the September quarter, Apple’s iPhone sales in India surpassed 2.5 million units, reaching an all-time high in revenue. However, the company is facing stiff competition from Huawei in China.
It is important to note that Apple adopted a conservative approach by minimizing its expenditure on marketing and other operating activities. In the September quarter, the tech giant’s total operating expenses even decreased 4.17% YoY, to $62.53 billion. On a quarterly basis, the increase in operating expenditure was a mere 6.34%.
Despite these challenges, Apple remains optimistic about a strong holiday quarter, spanning from October to December (Q1 FY24).
