(Image via inc.com)
Business Manager: Julian Cassady
After the stock market closed on February 2nd, tech giant Apple revealed its performance for the first business quarter of 2023.
Financial analysts were pleasantly surprised by Apple’s sustained momentum amid other tech companies cutting staff and scaling back operations since November 2022.
Apple’s revenue breakdown:
– Total revenue: $117.1 billion versus $121.1 billion expected.
– iPhone revenue: $65.7 billion versus $68.3 billion expected.
– Mac revenue: $7.7 billion versus $9.72 billion expected.
– iPad revenue: $9.4 billion versus $7.7 billion expected.
– Wearables: $13.4 billion versus $15.3 billion expected.
– Services: $20.7 billion versus $20.4 billion expected.
These figures show some interesting trends that reflect the overall economy’s performance.
Notably, iPhone revenue is down. iPhones are widely considered an extreme luxury good, so consumers are more likely to hang on to their old models for an extra year or two when the economy is contracting.
Along with macroeconomic effects, iPhone sales are also down due to a lack of new and exciting features in the latest models. Many consumers don’t see the benefit in shelling out hundreds just for a slightly better camera.
iPad sales were conversely a smashing beat on expectations.
An interesting theory of why iPad sales are soaring is that parents use them to entertain and distract their toddlers and young children. This falls in line with the COVID-19 baby boom since many of those babies are now 2-3 years old.
Mac’s computer revenue was down by a hefty margin compared to expectations.
The reason for this is very similar to the reasons I gave for iPhone sales being down. The apparent difference is that the disparity between actual revenue vs. expectations is much higher with the Mac than with the iPhone.
This trend might incline Apple to slow down the production of Mac computers considerably.
Apple Watch sales were also down due to a lack of new features to entice customers.
Aside from the revenue misses and beats, Apple’s services aligned with its expectations. Business services and consumer subscription-based services continue to grow in demand and are significant sources of revenue for other tech giants like Amazon and Microsoft.
Apple continues to perform well in a sea of uncertainty, especially among companies in the tech industry.
Following the earnings report, Apple stock became highly volatile, fluctuating by three percent. Ultimately the share price ended flat after after-market trading that day.
Apple’s stock price has continued to rally along with the rest of the stock market following its earnings.
It’s almost as though the entire market was holding its breath, waiting to see how Apple performed before anybody was willing to make any bets on the economy.