() — Apple reported Thursday that its revenue fell 3% to $94.8 billion for the first three months of 2023 as consumers cut spending on smartphones and computers amid fears of an impending recession.
The company’s revenue was slightly better than Wall Street expected, but still represented the second straight quarterly revenue decline for the iPhone maker. Apple’s net income also fell more than 3% from the year-ago quarter to nearly $24.2 billion.
Apple tried to appease investors by announcing up to $90 billion in share buybacks. Apple shares rose a little more than 1% in after-close trading on Thursday following the results.
Despite the continued decline in revenue, there were bright spots in the report.
Apple CEO Tim Cook said Apple hit a “record in the March quarter of [ventas] of iPhone despite the challenging macroeconomic environment” and that the installed base of active devices reached an all-time high.
Apple also posted an all-time record for services sales of $20.9 billion for the quarter. The services business, which includes Apple Music and Apple TV+, is an increasingly important revenue driver for Apple that is less cyclical than hardware sales. Apple now has more than 975 million paid subscriptions across all its services, 150 million more than last year, chief financial officer Luca Maestri told analysts on Thursday’s analyst call.
Apple’s latest quarterly earnings report comes amid a sharp drop in global laptop, computer and smartphone sales after a surge early in the pandemic.
Worldwide laptop and PC shipments were down 30% in the first quarter of 2023 compared to a year earlier, according to Gartner data. Global smartphone shipments fell 14.6% last quarter, according to separate data from market intelligence firm IDC.
Still, the company’s better-than-expected sales report “suggests that Apple’s premium smartphone business may be insulated from concerns about deteriorating consumer confidence and a worsening macroeconomic outlook,” Jesse said. Cohen, a senior analyst at Investing.com, in a statement.
Apple’s report on Thursday caps a closely watched earnings season for Silicon Valley amid broader economic jitters. The Big Five tech companies all beat Wall Street estimates, but the numbers paint a bleak picture for the industry right now.
Apple and its peers once enjoyed seemingly limitless growth. Now, these businesses are struggling to increase sales and profits, or are falling.
Cook on Thursday offered his thoughts on artificial intelligence, which many major tech companies have focused primarily on in recent months.
“I think it’s very important to be mindful and thoughtful in how you approach these things, and there are a number of issues that need to be resolved… but the potential is certainly very exciting and we’ve obviously made tremendous progress in integrating AI into our products. and services,” Cook said. “We think AI is huge and we will continue to weave it into our products very carefully.”
