Apple Disappoints As FY23 Results Decline

Apple’s share price has taken a hit after its fourth quarter and year-end results revealed the iPhone giant is experiencing significant declines with a number of its hardware product lines.

The results revealed some growth in Q4 iPhone sales – coupled with strong performance from services. But this could not disguise the fact that Apple is going through a significant rough patch with its Mac portfolio, and to a lessen extent its iPad and wearable and accessories portfolio.

The declines in those product lines, coupled with a gloomy projection for the upcoming holiday quarter, resulted in Apple shares falling 3 percent to $172. This is now the fourth quarter in a row that overall sales at Apple were down.

Q4, FY23 Results

Overall quarterly iPhone revenue was up year over year – even with just a week or so of iPhone 15 sales factored into the numbers. But worryingly, all of the company’s other hardware divisions recorded declines.

Overall results for the fourth quarter ending 30 September, saw Apple posting a net profit of $22.9bn, up from a net profit of $20.7bn in the same year-ago quarter.

Quarterly sales however declined 1 percent to $89.5bn, from $90.1bn a year earlier.

With the full year figures, Apple posted a net profit of $97bn, down from a net profit of $99.8bn in 2022.

Year-end sales also declined to $383bn from $394bn in 2022.

“Today Apple is pleased to report a September quarter revenue record for iPhone and an all-time revenue record in Services,” said CEO Tim Cook. “We now have our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon neutral Apple Watch models, a major milestone in our efforts to make all Apple products carbon neutral by 2030.”

Plummeting Mac

But digging into the results, it is clear that some of Apple’s product lines are struggling.

Full year iPhone sales were down to $200.6bn in 2023 compared with $205.5bn in 2022. That said, iPhone sales in the fourth quarter did rise slightly to $43.8bn (from $42.6bn in the same year-ago quarter), as Apple benefited from a few weeks of sales of the latest iPhone 15 portfolio.

But Apple’s other hardware line ups did not fare so well.

The worst performance came from the Apple Mac, where full year revenue plummeted to $29.3bn for 2023, down from $40.2bn in 2022.

This could explain why Apple was so keen to introduce its updated MacBook Pros and a refreshed iMac this week.

There was also a full year decline in iPad sales, which fell to $28.3bn from $29.3bn in 2022.

Wearables, Home, and Accessories full year also declined $39.8bn, from $41.2bn in 2022.

The only growth (other than Q4 iPhone sales) came from Apple Services, which posted revenues of $85.2bn in 2023, up from $78.1bn in 2022.

Apple added to the investor gloom on Thursday, when it predicted quarterly sales that were below market estimates.

Apple executives on conference calls blamed weak demand for iPads and wearables, especially in key market China, amid inflationary and economy worries in many parts of the world.