Apple Beats Estimates thanks to iPhone & Services but records 4th Quarter Sales Decline
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Transcript of Tim Cook's Commentary from Today's Financial Conference Call covering Fiscal Q4 2023

1 x full size - cover tim cook  conference call commentary

Below is a transcript in-part of Apple's Financial Conference Call held this afternoon. Our report covers only the Tim Cook segment highlighting key products and services.

Tim Cook: Today, Apple is reporting revenue of $89.5 billion for the September quarter. We achieved an all-time revenue record in India as well as September quarter records in several countries, including Brazil, Canada, France, Indonesia, Mexico, the Philippines, Saudi Arabia. Turkey, the UAE, Vietnam, and more.

iPhone revenue came in ahead of our expectations, setting a September quarter record, as well as quarterly records in many markets, including China mainland, Latin America, the Middle East, South Asia, and an all-time record in India. In Services, we set an all-time revenue record with double-digit growth and ahead of our expectations.

During the September quarter, we continue to face an uneven macroeconomic environment, including foreign exchange headwinds, and we’ve navigated these challenges by following the same principles that have always guided us. We’ve continued to invest in the future and manage for the long term. We’ve adapted continuously to circumstances beyond our control, while being thoughtful and deliberate on spending. And we’ve carved a path of groundbreaking innovations and delivered with excellence every step of the way. That includes Apple Vision Pro, which has gotten such an amazing response from developers who are currently creating truly incredible apps. We’re excited to get this magical product in the hands of customers early next year.

Now let me share more about our products, beginning with iPhone. iPhone revenue came in at $43.8 billion dollars, 3% higher than a year ago, and a new record for the September quarter. This fall, we were thrilled to debut the iPhone 15 lineup. The all-new iPhone 15 and iPhone 15 Plus feature a gorgeous design, powerful cameras, and the intuitive dynamic island. Powered by the industry-leading A17 Pro, our iPhone 15 Pro lineup has a beautiful, strong, and durable titanium design, and the best iPhone camera system ever, including a 5x telephoto lens on iPhone 15 Pro Max. Customers are loving the entire iPhone 15 family, and reviews have been off the charts.

In Mac, revenue came in at $7.6 billion, down 34% year over year from the prior year’s record quarter. This was due to challenging market conditions as well as difficult compares against the supply disruptions and subsequent demand recapture we experienced a year ago. Earlier this week we were excited to unveil the next generation of Apple silicon with our incredible family of M3 chips, M3, M3 Pro, and M3 Max. We’re continuing to innovate at a tremendous pace. and our industry-leading lineup of personal computers just got even better. The new MacBook Pro lineup brings our most advanced technology to our pro users, while iMac, the world’s best-selling all-in-one, just got faster and more capable. And according to the latest data from Student Monitor, nearly two out of three college students chose a Mac. We couldn’t be more excited about the future.

Turning to iPad. Revenue for the September quarter was $6.4 billion. iPad sets the gold standard for tablets, and our competitors are unable to match the iPad experience that is enabled by our seamless integration of hardware and software.

iPad is also our most versatile product. In classrooms around the world, it’s helping educators bring lessons to life while giving students a window into the world around them. And in artist workshops, design studios, and everywhere else creative minds come together, iPad supercharges the creative process, helping users take their ideas further than they ever could before.

Across wearables, home, and accessories, revenue came in at $9.3 billion. Apple Watch has become essential in our lives, and this is our best Apple Watch lineup ever. With Apple Watch Series 9 and Apple Watch Ultra 2, we’re giving people even more tools to stay safe and live healthy, active lives. With the new double-tap gesture, users can easily control Apple Watch Series 9 and Apple Watch Ultra 2 using just one hand and without touching the display. It feels like magic. Our latest Apple Watch lineup also includes our first-ever carbon-neutral products, a significant achievement of innovation and determination.

Apple’s unique ecosystem of hardware, software and services delivers an unparalleled user experience. During the quarter, we also had the chance to introduce a range of exciting new updates to our software that will allow users to get even more out of their devices. Whether it’s personalized contact posters and new FaceTime features in iOS 17, new tools for users to make their experience their own in macOS Sonoma and iPadOS 17, or a bold new look in watchOS 10 that lets you see and do more, faster than ever, Apple is delivering an even better, richer experience that users are loving.

Services revenue set an all-time record of $22.3 billion, a 16 percent year-over-year increase. We achieved all-time revenue records across App Store, advertising, AppleCare, iCloud, payment services and video, as well as a separate quarter revenue record in Apple Music. Whether subscribers are waking up to headlines on Apple News+, getting their morning workout in with Fitness+, feeling the beat with Apple Music on their way to work or school, or unwinding at the end of the day with Apple Arcade, we have so many different services to enrich their day.

Apple TV+ continues to delight customers as well, with new and returning shows like The Morning Show, Lessons in Chemistry, and Monarch, we’re telling impactful stories that inspire imagination and stir the soul. Making movies that make a difference is also at the heart of Apple TV+, and we were thrilled to produce Martin Scorsese’s Killers of the Flower Moon, a powerful work of cinema that premiered in theaters around the world last month. We’re proud to say that since launch, just over four years ago, Apple TV+ has earned nearly 1,600 award nominations and nearly 400 wins. We also offer subscribers an unprecedented live sports experience with MLS Season Pass. We couldn’t be more pleased with how our partnership with Major League Sports soccer has gone in its first year. Subscriptions to MLS Season Pass have exceeded our expectations, and we’re excited to continue that momentum next year. With the playoffs now underway, we can’t wait to see who takes home the MLS Cup.

And nowhere does the magic of Apple come alive more than it does in our stores. Over the past year, we’ve continued to find ways to connect with even more customers. We welcomed customers to our first-ever retail locations in India. We also opened doors to new stores in Korea, China, and the U.K., and expanded the Apple Store online to Vietnam and Chile, and we have another store opening in China this week. In September, I joined our team at Apple 5th Avenue on launch day, and the energy and excitement were unbelievable. Every time we connect with a customer, we’re reminded why we do what we do, from simple joys of creating and sharing memories, to life-saving features like Emergency SOS Via Satellite, we’re enriching lives in ways large and small.

And whether we’re working to safeguard user privacy, ensure technology made by Apple is accessible for everyone, or build an even more inclusive workplace, we’re determined to lead with values. Our environmental efforts are a great example of the intersection of our work and our values. Across Apple, we act on a simple premise: The best products in the world should be the best products for the world. We’ve made our environmental work a central focus of our innovation because we feel a responsibility to leave the world better than we found it, and because we know that climate change cannot be stopped unless everyone steps up and does their part. Our first-ever carbon-neutral products represent a major milestone, and we’re going to go even further. We plan to make every product across our lineup carbon neutral by the end of the decade. And we’re not doing it alone: Over 300 of our suppliers have committed to using 100% clean energy for Apple production by 2030. We also continue to invest in entrepreneurs who are lighting the way for a greener, more equitable future. Through our third Impact Accelerator class, we’re proud to support a new class of diverse innovators on the cutting edge of green technology and clean energy.

Apple is always looking forward, driven in equal measure by a sense of possibility and a deep belief in our purpose. We’re motivated by the meaningful difference we can make for our customers, and keenly determined to push the limits of technology even further. And that’s why I’m so confident that Apple’s future is bright. With that, I’ll turn it over to Luca.

To review the Quarter's Summary from CFO Luca Maestri and the Q&A segment, read the full Six Colors transcript.

10.0X3  Quarterly Financial News

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