Apple reports biggest quarterly revenue drop since 2016

What happened now? Apple has just released one of the worst quarterly reports in years. For the three-month period ending December 31, 2022, Apple reported quarterly revenue of $117.2 billion, down more than five percent from the $124 billion it generated last year.

Apple’s largest source of income, the iPhone, saw income will fall to $65.8 billion in the fourth quarter from $71.6 billion in the same period a year earlier. The Mac category brought in $7.7B, down from $10.9B year on year, while the Wearables/Home/Accessories category dropped to $13.5B from $14.7B.

iPad sales rose year-over-year from $7.2 billion in the fourth quarter of 2021 to $9.4 billion last holiday season. Similarly, Apple’s services category has grown from $19.5 billion to $20.8 billion.

CEO Tim Cook recognized challenging conditions he and others continue to navigate, but Apple’s accompanying press release focuses on the positives. Cook highlighted the fact that Apple now has more than two billion active devices worldwide. In addition, in the fourth quarter, the services sector set a record for revenue.

In an interview with CNBC, Cook pointed to three key factors that impacted Apple’s results: manufacturing issues in China affecting the iPhone 14 Pro and iPhone 14 Pro Max releases, a strong dollar, and the overall macro environment.

Apple stock rose 3.7% in early morning trading, according to the report.

Apple did not give forecasts for the next quarter. In fact, the iPhone maker hasn’t made predictions since the start of the pandemic in 2020. CNBC they expect Apple to make about $98 billion in the first quarter of 2023.

Apple recently brought back a version of its full-sized HomePod smart speaker with updated internals and a lower $50 price tag. The long-rumored AR/VR headset could also come out this year, possibly at Apple’s annual WWDC with a fall launch window. New iPhones are pretty much scheduled for September, but don’t expect to see updated iPads this year as they are reportedly delayed to 2024.

Image credit: Hugo Agut Tugal, Zhiyue