Macs Still Growing As Apple Sidesteps Dark Clouds Over Big Tech

Apple bucked negative sentiments in a tough week for big technology businesses by meeting analysts’ revenue estimates for its latest quarter, yet it too is now warning of economic ripples ahead.

For its Q4 ended 30 September [PDF], Apple showed that gadget lust for its devices is holding up relatively well: turnover was up 8.1 percent year-on-year to $90.15 billion. CEO Tim Cook said it would have grown double digit had it not been for the strength of the dollar.

“We reached another record on our installed base of active devices, thanks to a quarterly record of upgraders and double-digit growth in switchers on iPhone,” Cook said. “I'm also happy to report that during the quarter, silicon-related supply constraints were not significant.”

Product sales grew 9 percent to $71 billion. Within this, the iPhone brought in $42.63 billion in revenue, up 9.67 percent, albeit lower than analyst forecasts. However Mac revenue jumped 25.39 percent to $11.51 billion, well ahead of the consensus from market watchers.

CFO Luca Maestri said sales were boosted by the launch of the latest MacBook Air and MacBook Pro that are powered by the M2 chip, and "we were able to satisfy pent up demand that carried forward from significant supply constraints we faced during the June quarter."

Cisco, which linked arms with Apple years ago, offered Macs to all its staff to "help attract and retain top talent", the exec claimed.

In line with the wider tablet market, iPad sales dropped 13 percent to $7.2 billion. Maestri said this was a "challenging compare due to the launch of new iPads a year ago." The latest iPad was announced last week.

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Demand for Apple Wearables, Home and Accessories held strong, with revenue up 10 percent to $9.7 billion, driven by new purchasers of the Watch and a refreshed AirPod Pro headphones.

Services grew 5 percent to $19.2 billion and more than 900 million paid subscribers are on the Services platform. Apple noted some “softness” in the digital ad spending, however.

Operating profit for the quarter was $24.9 billion versus $23.78 billion a year earlier.

For the year, Apple recorded $394 billion in revenue, up 8 percent, and $119 billion in income from operations.

Other big tech vendors released their financials this week, including Meta, Microsoft, Google, and AWS. Nearly $800 billion was wiped off the value of big tech stock, with Meta hit the hardest: dipping ad sales and no end in sight to Mark Zuckerberg’s metaverse vanity project saw Wall Street lose its patience.

Apple again refused to provide financial guidance for the next quarter - a trend that started early in the pandemic when forecasting becomes an even more difficult art form.

Maestri warned revenue growth will "decelerate," in part due to the strong dollar, meaning lower revenue realization from overseas sales, and a tough year-on-year comparison for Macs following the launch of the newly designed Mac late in calendar 2021. ®