Mac shines as iPhone, iPad, Watch revenue stumbles for Apple

Apple devices

Apple’s quarterly results did not paint a pretty picture when it comes to revenue earned from its devices. In the second quarter of 2023, Apple reported $90.75 billion in revenue. The figure was down from $94.8 billion the company reported in the corresponding quarter in 2023.

Apple's earnings report revealed a mixed bag for its devices. Overall, products revenue was $66.9 billion, down 10% year-over-year.

The star of Apple’s line up of devices has always been the iPhone. However, iPhone revenue declined year-over-year, falling from $51.3 billion to $45.96 billion. Apple CEO Tim Cook in a call with investors pointed out "significant pent-up demand from the December quarter COVID-related supply disruptions on the iPhone 14 Pro and 14 Pro Max.”

Cook said that this was a “one-time impact” that added close to $5 billion to the March quarter revenue last year. “If we remove this from last year's results, our March quarter total company revenue this year would have grown,” Cook told investors.

When it comes to revenue from iPad, the key reason has been no new iPads launched in almost 18 months. iPad generated $5.6 billion in revenue, which was down 17% year-over-year. The last iPads Apple launched were the M2 iPad Pro and the 10th-gen iPad in October 2022. Luca Maestri, CFO, Apple said that iPad “continued to face a challenging compare against the launch of the M2 iPad Pro and iPad 10th generation from last year.”  Globally, the tablet market has seen a decline a drop of 11% shipments year-on-year in Q4 2023.

Apple is set to launch two new iPad models — iPad Pro and iPad Air — on May 7 and it could provide a much-needed fillip to the declining revenue from iPad.

The ever-reliable category of Wearables — Apple Watch, AirPods and HomePod — also saw a decline in revenue. In the second quarter, revenue from Wearables, Home and Accessories revenue was $7.9 billion, down 10% year-over-year.

The one category of devices which saw revenue grow for Apple was the Mac. Riding on the impressive M3 MacBook Air, — launched in March 2024 — Mac revenue was $7.5 billion, up 4% year-over-year.

The other bright spot was the Services business for Apple. Services revenue reached a record high of $23.87 billion, up from $20.9 billion in the same quarter last year. Services business includes Apple's app store, subscriptions, and other digital offerings.

Also read: Apple CEO Tim Cook on being excited about “the whole thing” in India