Apple reported its fiscal fourth quarter profit on Thursday, revenue of $90.1 billion and earnings per share of $1.29 — both above Wall Street expectations — at a time when other tech giants aren’t doing so well. Virtually all of Apple’s divisions, including iPhone, Mac, services and wearables, grew year over year, with the exception of the iPad. But despite the YOY growth, iPhone revenue remained below estimates.
There are suspicions among analysts and other reports that the iPhone 14 and iPhone 14 Plus are fall short of Apple’s expectations for the “regular” lineup, with most upgraders preferring the 14 Pro and 14 Pro Max. The Pro phones have a faster processor, an improved camera system and the new Dynamic Island interface. The quarter included just eight days of iPhone 14, 14 Pro, and 14 Pro Max sales; the larger Plus version was not released until a few weeks later.
The offer is limited for the iPhone 14 Pro models and the new Apple Watch Ultra, CFO Luca Maestri . told The Wall Street Journal.
“We’ve clearly countered industry trends on the phone when you look at third-party estimates of what the smartphone industry has done,” CEO Tim Cook told CNBC. He also reiterated that Apple is “deliberate” in hiring and thus slowing the pace of hiring new employees.
Apple’s services division grew year over year, but only by a few digits. The company has just increased subscription prices for Apple Music, Apple TV Plus and the Apple One bundle, so that could give a boost in the coming quarters after this slowdown. The monthly price of Apple Music only went up by a dollar, but it marked an end to the long-standing $9.99 per month rate for streaming music. Competitors like Spotify and Amazon Music may soon follow.
As for the software, Apple rolled out iOS 16 and watchOS 9 during the quarter, but waited until this week to release iPadOS 16.1 and macOS Ventura. The iPad software’s new Stage Manager feature has been criticized.
After announcing new iPads earlier this month, Apple is expected to release upgraded 14-inch and 16-inch MacBook Pros in the coming weeks.