The release of Apple’s third-quarter results brings with it intriguing insight into where the tech giant is making its money, as whilst iPhone sales are falling, its services are reaching new heights.
Apple’s Q3 ran up to 1 July 2023 and within the quarter, revenue fell 1% YoY to $81.8 billion. Quarterly earnings per diluted share, meanwhile, increased by 5% YoY to $1.26.
Hardware and services
Even with Apple’s hardware sales declining, the blow to mobile is perhaps less significant than other devices and can be partially explained by a wait for the upcoming iPhone 15. Apple is calling its overall iPhone sales "robust".
The fall of Mac sales, meanwhile, doesn’t come with any positive news of a new product ahead. iPad sales are also down a noteworthy 20% compared to Q3 2022 following a lengthy period with no new tablets.
In fact, only wearable hardware like the Apple Watch has seen an increase YoY.
Thankfully for Apple, paid subscriptions now total more than 1 billion and the company’s Services revenue reached an all-time high in the latest quarter. The total install base of active devices also reached new heights around the world.
"We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone," said Apple CEO Tim Cook.
"Our June quarter year-over-year business performance improved from the March quarter, and our installed base of active devices reached an all-time high in every geographic segment," added Apple CFO Luca Maestri. "During the quarter, we generated very strong operating cash flow of $26 billion, returned over $24 billion to our shareholders, and continued to invest in our long-term growth plans."
In late July, French regulators launched an investigation into Apple’s App Tracking Transparency for "implementing discriminatory, non-objective and non-transparent conditions", forcing the prompts on third-party software while limiting them on its own. Following this, Apple has entered its ATT endgame.