Apple has released its earnings report for the first quarter of fiscal 2024 (i.e., the fourth quarter of 2023), which shows the company's performance during the year-end shopping season. According to the financial report data, Apple's revenue in the fourth quarter was 1195$800 million, up 2% year-on-year, ending four consecutive quarters of revenue decline, with a net profit of 339$200 million, up 13% year-over-year, and earnings per share of 2$18, an all-time high.
Apple's revenue growth was mainly driven by the strong performance of the iPhone and services business. The iPhone is Apple's core product, accounting for more than half of total revenue. Apple's fourth-quarter iPhone revenue was $69.7 billion, up 6% year-on-year, higher than market expectations of $68.6 billion. This is the first full quarter after the launch of Apple's new iPhone 15 series last year, reflecting the sales momentum of the new phones. According to data from market research institutes, Apple's smartphone market share in the fourth quarter of last year was 24%, surpassing Samsung's 17% and becoming the world's No. 1 mobile phone manufacturer.
Services is Apple's highest-margin business, accounting for a quarter of total revenue. Apple's fourth-quarter services revenue was 231200 million US dollars, a year-on-year increase of 113%, a record high for the fourth consecutive quarter. Services include the App Store, audio streaming such as Apple Music and Apple TV+, iCloud storage, AppleCare warranty, Apple Pay and other product payments. The growth in the services business was driven by the increasing number of users in Apple's App Store, a significant increase in Apple TV+ viewership, and a continued expansion of the device install base. By the end of 2023, the portfolio of Apple's services had more than 1 billion paying subscribers.
However, Apple's other hardware businesses have not performed well, especially in the Greater China market. Greater China is Apple's third-largest market, accounting for 20% of Apple's annual revenue. Apple's revenue in Greater China in the fourth quarter was 208200 million US dollars, down 129%, below market expectations of $23.5 billion. This was Apple's worst fourth-quarter performance in Greater China, reflecting the fierce competition and changes in consumer demand that Apple faces in the Chinese market.
Apple's other hardware businesses include Mac computers, iPads, tablets and wearables, home and accessories, and more. Apple's fourth-quarter Mac revenue was 77800 million US dollars, a year-on-year increase of 06%, slightly higher than expected, but well below the 34% year-on-year growth in the third quarter of last year. iPad revenue is 70$200 million, down 25% year-on-year, lower than expected. Wearables, home and accessories revenue was 119$500 million, down 11% year-on-year, but higher than expected. Apple's other hardware business has been affected by factors such as product update cycles, **chain issues, and market saturation.
February** Dynamic Incentive Program
Apple CEO Tim Cook said at the earnings conference** that Apple was satisfied with the performance of the fourth quarter, especially the record revenue of the iPhone and services business. He also highlighted that Apple's record earnings per share came against the backdrop of one trading week less in the fourth quarter than a year earlier, indicating a "tremendous acceleration" in the company's growth compared to the previous quarter.
Cook also expressed confidence in Apple's performance in Greater China, where he believes there are still huge opportunities for Apple, especially in terms of the adoption of 5G networks and the launch of innovative products. He also said that Apple occupies four of the six best-selling smartphones in urban China, and that the decline in iPad sales is due to a high year-on-year base, and that last year was the first time in the history of the iPad that no new models were released, and that new iPads will be launched this year.
After Apple's earnings report, its stock price briefly **1% in after-hours trading, but then turned **, falling more than 3%. Market analysts believe that although Apple's earnings report has bright spots, it also has shortcomings, especially in Greater China, which shows Apple's challenges in the Chinese market. Some analysts warn that Apple's iPhone sales may struggle to maintain growth momentum in 2024 due to longer replacement cycles for consumers and more innovative and attractive products from competitors, such as foldable phones.