Apple said it experienced a “significant acceleration” in sales of its Mac computers in the final three months of 2023, which, along with a boost in iPhone sales, helped the tech giant reach an all-time record of 2.2 billion active devices.
The Cupertino, Calif.-based company reported Thursday that iPhone and Mac sales along with its fast-growing services business allowed revenue to grow 2 percent year-over-year to $119.6 billion in the first quarter of its 2024 fiscal year, which ended Dec. 31.
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What held it back from growing even more were double-digit sales declines for iPads and its collective business of wearables, smart home products and accessories. The company also said fourth-quarter revenue took an estimated 2 percent hit due to the same period a year ago having an extra week and “COVID-19-related factory shutdowns that limited iPhone supply.”
Apple disclosed the results ahead of the Friday launch of its Vision Pro augmented reality headset. On the earnings call, Tim Cook, the company’s CEO, called it a “revolutionary device” that will herald the “era of spatial computing,” and Apple CFO Luca Maestri said there is “strong excitement” from major businesses such as Walmart, Nike, Bloomberg and SAP.
While the company was happy to talk about its prospects in augmented reality and general business trends, Cook was much more reserved when analysts asked him about Apple’s generative AI strategy, a topic the iPhone maker has talked little about so far.
But he indicated that the company’s radio silence over generative AI—for which rivals like Lenovo have already shown off capabilities in phones and laptops—is only happening because Apple isn’t ready to show off what it’s working on in the area.
“Let me just say that I think there’s a huge opportunity for Apple with GenAI and AI—without getting into more details and getting out in front of myself,” Cook said near the end of the call.
How Apple Fared In Sales For iPhones, Macs And Other Categories
Fourth-quarter revenue for Apple’s devices business was $96.5 billion, which was up less than $100,000 from the same period a year ago.
The brightest spot in the devices business was the iPhone segment, which grew sales by 6 percent year-over-year to $69.7 billion on the strength of the company’s new iPhone 15 series.
Mac sales, on the other hand, only grew 1 percent year-over-year to $7.8 billion, but Maestri said it marked a “significant acceleration” from the previous quarter. He added that nearly half of all Mac buyers during the period were “new to the product,” which contributed to “an all-time high” for the computer brand’s install base.
Revenue for iPads was where Apple hurt the most, declining 25 percent year-over-year to $7 billion. Maestri said a major challenge to growth in this segment was the fact that the company released its latest iPad generation in the same quarter a year ago, though he said the install base for the device category still reached an “all-time high” due to many new buyers.
Sales for Apple’s wearables, Home products and accessories declined 11 percent year-over-year to $12 billion. Maestri cited a similar situation to iPads, with the company having launched major products like the second-generation AirPods Pro and first Apple Watch Ultra a year ago.
The company’s largest source of growth for the fourth quarter was its services business, which includes the App Store, Apple Music, iCloud, and payment services, among others. That business grew 11 percent year-over-year to $23.1 billion.
“Our installed base is now over 2.2 billion active devices and continues to grow nicely establishing a solid foundation for the future expansion of our services business,” Maestri said.
Apple’s stock price was down more than 3 percent in after-hours trading.