The smartphone market is shrinking, but Apple’s iPhone brought in more money last quarter. Bottlenecks in the Christmas business could also have contributed to this.
Apple’s iPhone business is bracing itself against the slack in the smartphone market – but overall group sales have fallen for the second quarter in a row. The main triggers were declines in the sale of Mac computers and iPad tablets. Apple also pointed out that sales would have increased slightly if exchange rates had remained the same.
The iPhone business increased by 1.5 percent to $51.33 billion, as Apple announced after the US stock market closed on Thursday. It was an all-time high for the second quarter, which ended in March – despite the unfavorable exchange rates.
In the Christmas quarter, sales of the more expensive and lucrative iPhone 14 Pro were slowed down by corona lockdowns in Chinese factories. As a result, there was a pent-up demand in the past quarter. Just how much that drove sales is difficult to quantify, said Apple boss Tim Cook in a conference call with analysts. Industry-wide smartphone sales had meanwhile fallen by around 15 percent according to calculations by market researchers.
Business slowed by weak economy
Sales of Mac computers fell by a good 31 percent to $7.17 billion. The business was slowed down, among other things, by the weak economy. However, Apple also pointed out that the market launch of Mac models with chips developed in-house had given sales a strong boost in the past quarter.
Computer sales had recently shrunk significantly after the boom at the beginning of the corona pandemic. According to calculations by the market research company IDC, PC sales fell by 29 percent across the industry in the past quarter. Apple was particularly hard hit with a drop of a good 40 percent to 4.1 million.
iPad sales also fell sharply, while the services business hit a record, up 5.5 percent to $20.9 billion. The number of subscriptions for various services such as Apple Music or Fitness recently reached 975 million – an increase of 40 million within three months.
Headwind from unfavorable exchange rates
Overall, sales in the second fiscal quarter to the end of March fell by three percent to 94.8 billion US dollars (86 billion euros). The bottom line was a profit of 24.15 billion dollars, after around 25 billion dollars in the previous year.
Apple shares rose by around 2 percent in after-hours trading. Group sales in the past quarter exceeded analysts’ expectations. For the current quarter, Apple is once again preparing for headwinds from unfavorable exchange rates. At the same time, the group raised the dividend and promised further share buybacks of 90 billion dollars.
In view of the current hype about software based on artificial intelligence such as the chatbot ChatGPT, Cook was also asked about Apple’s strategy in this area. His answer was that while Apple saw “interesting potential” in AI applications, they would “very carefully” incorporate them into their own products.