Apple revenue declined 5% in the year-end 2022 quarter amid iPhone manufacturing disruptions and fell short of Wall Street’s earnings estimates for the critical holiday-shopping period.
Meanwhile, Apple’s Services segment turned in revenue of $20.8 billion — a quarterly record — but its growth slowed down in the period, to a 6.4% year-over-year increase. The segment includes the App Store, Apple Pay, and subscription services like Apple TV+, Apple Music and iCloud.
Overall, the tech giant reported $117.2 billion on the top line and net income of $30 billion (down 13%), or $1.88 per share for the quarter ended Dec. 31, 2022, which is Apple’s Q1 of fiscal 2023. Analysts on average expected Apple to post revenue of $121.1 billion and earnings per share of $1.94, per Refinitiv data.
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Sales of iPhones — by far Apple’s biggest business segment — dropped 8.2% in the year-end quarter, to $65.8 billion. The company experienced shortages and longer-than-expected ship times for iPhone 14 models in the quarter, but Apple now has manufacturing capacity “where we want it to be,” Apple CEO Tim Cook (pictured above) said on the earnings call. Despite the decline, Apple touted that its installed base of active devices had crossed 2 billion active devices worldwide in the period.
“As we all continue to navigate a challenging environment, we are proud to have our best lineup of products and services ever, and as always, we remain focused on the long term and are leading with our values in everything we do,” Cook said in announcing the results. “During the December quarter, we achieved a major milestone and are excited to report that we now have more than 2 billion active devices as part of our growing installed base.”
Apple so far hasn’t enacted mass layoffs as its Big Tech peers Amazon, Alphabet and meta have in recent months. Cook, in an interview Thursday with the Wall Street Journal, said, “I view layoffs as a last-resort kind of thing.” He added, “You can never say never. We want to manage costs in other ways to the degree that we can.”
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