Apple's Latest Quarter Went Better Than Expected, But Sales Were Still Down

Apple has released its earnings report for its second fiscal quarter of 2023, and despite a fall in revenue and profits, CEO Tim Cook is upbeat about the numbers. For the quarter ending on April 1, Apple says its revenue dropped year-over-year by around 3% to $94.8 billion. Yet, the company says it also set a new record for iPhone sales in the March quarter, with net smartphone revenue climbing to $51.33 billion compared to $50.57 billion in the same quarter last year.

"It was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats," Cook told CNBC. The Apple CEO told Reuters that the company "set records for the iPhone installed base in every geographic segment," praising the company's performance in emerging markets like India.

The company recently opened its first two stores in the country and has been steading ramping up its production facilities in the country. But not everything was rosy in the hardware segment. Revenue from the Mac declined by roughly 30%, while the iPad, wearable, and smart home categories also took a hit. Despite the slump, Cook says the quarter was "better than expected" and also remarked that the company's supply chain was in a good state.

Services once again shine for Apple

As Apple took a hit in the hardware department with the exception of iPhones, software services were once again the bright spot on the company's balance sheet. Apple registered nearly $20.9 billion from its services portfolio — which includes the likes of Apple One, Apple Music, and Apple TV, among other search and subscription-linked products — up from the $19.82 billion it grossed in the same quarter last year.

Apple says it clocked "an all-time record in Services," but notes that the next quarter won't be much of a difference owing to challenging macroeconomic conditions. However, it appears that the company is ready to soup up its services portfolio. Earlier today, the company added 20 new games to Apple Arcade, its gaming subscription service that offers exclusive games and in-game content for iPhones and iPads for a monthly fee, just like Microsoft's own Xbox Game Pass service for PC and console games.

In the coming months, Apple is planning to add new health-centric tools to its fitness portfolio. Among them is a service codenamed Quartz that aims to provide personalized health plans and access to experts. The company is also working on another service that covers emotional assessment and guides users through tailored solutions like meditation exercises.