Apple on Thursday posted its fourth consecutive quarter of year-over-year sales declines as the iPhone maker continues to struggle with slower device sales amid an uncertain economic environment.
The company reported $89.5 billion in sales for the three months ended September 30, down 1% from the same period in the prior year and essentially in line with the $84.3 billion Wall Street analysts had expected. Despite the sales dip, Apple’s net income from the quarter grew nearly 11% year-over-year to $22.96 billion, beating analysts’ projections.
Apple (AAPL) shares fell more than 1% in after-hours trading following the report.
Revenue from Apple’s products segment dipped more than 5% year-over-year during the September, driven in particular by declines in Mac and iPad sales. iPhone revenue, however, ticked up by 3% from the year-ago quarter to $43.8 billion, marking a September quarter iPhone sales record.
The sales numbers may provide an early indication of the performance of the iPhone 15, following concerns from analysts that consumers would have fewer incentives to upgrade because the new lineup featured only minimal improvements. However, the iPhone 15 lineup went on sale only eight days before the end of the September quarter, so its real impact likely won’t be felt until Apple reports for the crucial holiday quarter. The company also announced upgrades to its laptops and desktop computers earlier this week.
“We believe this precarious macro [economic] environment, combined with a mature market, will lead to an uninspiring iPhone 15 cycle,” Brian White, an analyst at Monness Crespi Hardt said in a research note ahead of Apple’s Thursday earnings report.
Analysts also pointed to the 2.5% year-over-year dip in Apple’s China sales during the September quarter as a sign that the iPhone maker could be losing ground in that crucial market.
“Apple’s worrying China sales figures indicate demand for its high-end iPhones is slowing more than expected in the face of rising competition from local companies, including Huawei,” Investing.com senior analyst Jesse Cohen said in an emailed statement following Thursday’s report.
Sales growth in Apple’s services segment, however, continues to partially offset the declines in device revenue growth. Revenue from the services unit, which includes Apple’s subscription products like Apple TV+, notched more than 14% year-over-year gains in the September quarter.
And the company could see an additional boost from the services business in the December quarter after Apple last month hiked the prices of its Apple TV+, Apple Arcade and Apple News subscriptions by $2 or $3 per month each.
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