Apple reported strong financial results for the June 2023 quarter, surpassing Wall Street estimates despite a 1.4% decline in top-line revenue, mainly due to lower-than-expected iPhone sales.
CEO Tim Cook proudly announced a significant milestone for Apple, reaching over 1 billion paid subscriptions across all its apps and services, which increased by 150 million year over year. During the quarter, Apple’s services unit saw an 8.2% growth, generating $21.21 billion in revenue. The services segment includes various offerings like the App Store, Apple Pay, Apple Card, and subscription services such as Apple TV+, Apple Music, and iCloud.
Cook also revealed that Apple TV+ achieved a record quarterly revenue, with 54 Emmy Award nominations in 2023, though the company doesn’t disclose individual service results. Overall, Apple reported quarterly revenue of $81.8 billion, a 1.4% YoY decrease, and a net income of $19.9 billion, with earnings per diluted share of $1.26, representing a 5% increase, for the three months ending July 1 (fiscal third quarter of 2023). While Apple exceeded analyst expectations in services revenue, iPhone sales, the company’s largest segment, fell short of estimates at $39.7 billion, a 2.4% YoY decline. Wall Street had anticipated revenue of $81.64 billion and EPS of $1.19, according to Refinitiv.
Apple’s 1 billion paid subscriptions encompass both Apple-branded services and those offered by third-party apps. The company previously reported 975 million paid subscriptions in the previous quarter. Looking ahead, Apple expects sales growth in both services and iPhone businesses to accelerate in the September quarter, as stated by CFO Luca Maestri during the call. He highlighted the health of the subscriptions business, noting the remarkable growth from three years ago when the number was nearly half the current figure.
Mac sales experienced a 7.3% drop in the June quarter, while iPad revenue declined by 19.8%. On a positive note, sales in Apple’s Wearables, Home, and Accessories segment, which includes Apple Watch, increased by 2.5% to $8.28 billion.
In June, Apple unveiled Vision Pro, an augmented-reality/VR headset priced at $3,500, set to launch in early 2024 with Disney+ as a partner. This marks Apple’s first foray into a new product category since the Apple Watch’s launch in 2015. Cook expressed his belief in the profound impact of augmented reality and its potential to establish “spatial computing” similarly to how the iPhone introduced smartphones to millions. The Vision Pro units are currently being shipped to developer partners, with Cook stating that he uses the product daily.
With a market capitalization of around $3 trillion, Apple currently holds the position of the most valuable company globally.