As most of us approach the end of 2022, Apple is already living in the future in 2023—fiscal year 2023, that is. Apple recently ended its 2022 fiscal fourth quarter, which ran from June 26, 2022, to September 24, 2022. Last week, Apple released the results for its 2022 fiscal fourth quarter and held a call with analysts to discuss the results. Apple's fiscal fourth quarter is typically a transitional quarter; it is the first fiscal quarter—the one that we are in now—that is traditionally Apple's big revenue quarter because of holiday sales. But Apple still sells a lot of products in its fiscal fourth quarter, and in this past one, Apple saw record Q4 revenue of $90.1 billion, which was 8% more than this time last year. With about 90 days in a typical quarter and about $90 billion in revenue, it is fascinating that Apple can bring in a billion dollars every day without breaking a sweat. But as always, I'm not all that interested in the financial details; what interests me is that this is one of four times a year when Apple answers questions from a bunch of analysts, so I'm always curious to see what Apple has to say about the iPhone and iPad and related technologies. If you want to get all of the nitty-gritty details, you can listen to the audio from the announcement conference call on the Apple website, or you can read a transcript of the call prepared by Jason Snell of Six Colors. Apple's official press release is here. Here are the items that stood out to me.
iPhone
- iPhone revenue for the quarter was $42.6 billion, which is 10% higher than it was a year ago. For comparison, though, this time last year, iPhone revenue was 47% higher than the previous year.
- Apple CFO Luca Maestri said that Apple set a quarterly record for iPhone upgraders and grew switchers double digits. So there are lots of people getting a better iPhone, and lots of people getting a first iPhone.
- Maestri said that the active installed base of iPhones is now at a new all-time high across the world.
- Maestri said that the latest survey of U.S. consumers from 451 Research indicates iPhone customer satisfaction of 98%.
- Apple CEO Tim Cook said that during the past quarter, Apple sold three of the top four smartphones in the U.S. and the UK, the top three in urban China, the top six in Australia, four out of the top five in Germany, and the top two in Japan. Apple is not quite at Taylor Swift levels—she currently has all ten songs in the Billboard Top 10, the first artist to ever do that—but Apple is not that far off.
- To give you some context for the increase in iPhone revenue this past quarter, here is a chart showing the year-over-year percentage change since fiscal 2013 Q1, which is when Apple started reporting this type of revenue in this form.
iPad
- iPad revenue was $7.2 billion. This was down 13% compared to this time last year. (This time last year, iPad revenue was up 21% from the year before that.) What caused the decrease in revenue? One reason given was negative foreign exchange. Because the dollar is so strong right now against other currencies, Apple makes less money when people in other countries buy an iPad. Another reason given was that a year ago, Apple had launched a new iPad and iPad mini during 2021 Q4, and a new iPad Pro had just come out in 2021 Q3. So in 2021 Q4, there were lots of new iPads to buy. That wasn't true this year. This year, the Fall new iPad model release happened in October, which was calendar year 2022 but fiscal year 2023 Q1.
- Maestri said that the number of iPads in use reached a new all-time high.
- Maestri said that over half of the people who purchased a new iPad during 2022 Q4 were purchasing their first iPad.
- Here is a chart to show the year-over-year percentage change in iPad revenue since fiscal 2013 Q1, which is when Apple started reporting this type of revenue in this form. Although the last four quarters show decreases, remember that this chart shows change in revenue. So the iPad was still profitable during the past year, just not quite as profitable as it had been in the recent past.
Other
- Apple recently announced a price hike for its services, typically $1 or $2 more per month. In the call, Cook explained that there were essentially two reasons for that. For Apple Music, Apple's cost to license music increased, so Apple raised the cost of its service. Cook noted that this should mean that artists will get more money for their songs. For Apple TV+, the cost increase is because Apple has far more content available to watch than when the service launched, so Cook says that Apple "increased the price to represent the value of the service." Negative foreign exchange rates may have played a role in this one as well.
- Apple's wearable sector was up 10%, and Cook said a lot of the credit for that goes to the Apple Watch and AirPods Pro.
- If you want to see lots of interesting charts related to Apple's 2022 Q4 announcement, check out this post from Jason Snell at Six Colors.