Apple Fiscal Q3 2023 Beats Sales Expectations Despite Reduced iPhone and Mac Revenue

UTC by Tolu Ajiboye · 3 min read
Apple Fiscal Q3 2023 Beats Sales Expectations Despite Reduced iPhone and Mac Revenue
Photo: Apple Inc

For its fiscal Q3 2023, Apple reported reduced revenue from iPhone, Mac, and iPad sales, while revenue from Other Products rose 2%.

Cupertino-based tech giant Apple Inc (NASDAQ: AAPL) has released results for its fiscal Q3 2023, beating sales and earnings expectations following an 8% growth in annual services sales.

According to the report, Apple’s revenue for Q3 2023 fell 1% year-over-year (YoY) to $81.8 billion but was higher than estimates from Refinitiv analysts. The company’s margin came in at 44.5% over the 44.2% estimated. Furthermore, services revenue climbed 8% to $21.21 billion, higher than the estimated $20.76.

Unfortunately, Q3 2023 saw Apple’s iPhone and Mac revenue fall. Mac revenue was down 7% to $6.84 billion YoY but still higher than the estimated $6.62 billion. iPhone revenue also fell 2% YoY to $39.67 billion. For iPad revenue, Apple reported $5.79 billion, falling 20% YoY and lower than Refinitiv analysts’ $6.41 billion estimate. Fortunately, Other Products revenue climbed 2% to $8.28 billion. However, it didn’t beat the estimated $8.39 billion.

As usual, Apple did not provide any guidance and has not done so since 2020. However, Apple stock fell following CFO Luca Maestri’s comment that the company expects lower revenue in the September quarter. The CFO also said Mac and iPad sales will plunge by double-digit percentages. Despite the poor forecast, Maestri believes that iPhone sales will improve. He said:

“We expect our September quarter year-over-year revenue performance to be similar to the June quarter assuming that the macroeconomic outlook doesn’t worsen from what we are projecting today for the current quarter.”

Apple Plans Following Q3 2023 Results

Apple officially announced the Vision Pro mixed-reality headset in June at the company’s Worldwide Developer Conference (WWDC). In a recent conversation with CNBC, Apple CEO Tim Cook said the company is working on demos in select stores to give people an experience before the device goes on sale next year. Cook stated that Apple will launch demos and expects to “be overrun for a while with requests.” He believes a demo like this would be “a huge competitive advantage” for a product like Vision Pro. However, Cook did not provide a timeline for the demos.

Early last month, people familiar with Apple and a contracted assembly company Luxshare revealed that Apple has decided to reduce its production forecast for the Vision Pro. Reportedly, Apple will not produce up to 400,000 Vision Pro headsets in 2024. Reports also suggest that two suppliers of Vision Pro components were contracted to only supply enough for up to 150,000 headsets. This indicates that Apple will not meet the estimated sales forecast of a million units within the first year of release.

The CEO also confirmed reports that Apple has been developing a generative artificial intelligence (AI) tool and doing machine learning research for years. Coinspeaker reported last month that the company was working on an AI tool unofficially named “Apple GPT.” The tool is reportedly only available internally and to a small group of staff. Apple has not yet fully released it internally because a few unsolved concerns remain. Apple GPT was reportedly created as an experiment.

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