A few days ago, Apple released the results for its 2023 fiscal third quarter (which ran from April 2, 2023, to July 1, 2023) and held a call with analysts to discuss the results. This is typically not a big fiscal quarter for Apple, but Apple had a very good one this time last year with record revenue of $83 billion. This year, the revenue for the quarter was $81.8 billion, down about 1% from last year, but that is still better than two years ago which was a record for the fiscal third quarter. Apple makes so much money that even when it is a little down from the prior year, it still does very, very, well. 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
- Apple’s iPhone revenue for the quarter was $39.67 billion, down 2% compared to the record $40.67 billion this time last year.
- Apple CFO Luca Maestri said that well over 50% of all iPhones are sold using some sort of a program that helps to reduce the price: trade-in, installment payments, financing, carrier promotion, etc. Maestri said: “We want to do more of that because we think it really helps reduce the affordability threshold for our products and we think it is also one of the reasons why our product mix has been has been very strong during the last couple of cycles.”
iPad
- iPad revenue was $5.79 billion, down from $7.22 billion this time last year.
- Apple CEO Tim Cook said that revenue was down compared to last year in part because this time last year Apple was seeing lots of sales from the launch of the new iPad Air.
Other
- On April 30, 2020, Apple announced that it had over 515 million paid subscriptions across all of its services. Over half a billion subscriptions seemed pretty impressive. But now, just over three years later, Apple has announced over a billion paid subscriptions. That cuts across lots of different services—not only Apple Music and Apple TV+ but also third-party apps in which people pay money to Apple for a subscription. Nevertheless, that is a lot of people paying money to Apple every single month, and I’m sure that for Apple it helps to both increase overall revenue and even out revenue that otherwise has highs and lows as new products are released.
- Maestri noted that there are over 2 billion Apple devices in active use, a number that continues to grow.
- As for Apple TV+, Cook specifically mentioned that some of the particularly popular shows right now are the new shows Hijack and Silo and the returning shows Foundation and The Afterparty. I enjoyed and can recommend all four of those shows.
- So many people are talking about AI nowadays that it comes as no surprise that one analyst asked Cook about AI. Here is how Cook responded: “If you take a step back, we view AI and machine learning as core fundamental technologies that are integral to virtually every product that we build. And so if you think about WWDC in June, we announced some features that will be coming in iOS 17 this fall, like personal voice and live voicemail. Previously, we had announced life-saving features like fall detection and crash detection and ECG. None of these features that I just mentioned and many, many more would be possible without AI and machine learning. And so it’s absolutely critical to us. And of course, we’ve been doing research across a wide range of AI technologies, including generative AI for years. We’re going to continue investing and innovating and responsibly advancing our products with these technologies with the goal of enriching people’s lives.”
- Cook said that he is using a prototype of the Apple Vision Pro “daily.”
- Cook finished up his introductory remarks with this interesting statement: “Apple remains a champion of innovation, a company fueled by boundless creativity, driven by a deep sense of mission, and guided by the unshakable belief that a great idea can change the world. Looking ahead, we’ll continue to manage for the long term, always pushing the limits of what’s possible and always putting the customer at the center of everything we do.” That sounds good to me.