Apple Inc., the maker of iPhones, reported its second consecutive quarter of falling revenue last week alongside a surprising surge in iPhone sales from emerging markets like India and the Middle East.
The tech giant’s Q2 2023 report on May 4 showed a quarterly revenue of $94.8 billion, indicating a year-over-year decrease of 3% to $24.2 billion.
This is only the third time in the past decade that Apple has reported two consecutive quarters of declining revenue, according to The Wall Street Journal.
Apple’s figures have been marred by supply-chain disruptions and a sharp drop in consumer demand for computers and smartphones, according to CNN.
This is part of a larger trend, as PC shipments worldwide have declined 30% in the first three months of the year.
As The Dallas Express reported, most Americans are feeling financially burdened nowadays and this has cooled consumer spending. A poll taken in March by CNBC and Momentive revealed that 53% of respondents had no emergency savings, and 58% were living paycheck to paycheck.
There is little to suggest that Americans’ financial worries will go away anytime soon. For instance, interest rate increases by the Federal Reserve have just surpassed that seen at the start of the subprime mortgage crisis in 2007, as The Dallas Express reported.
In a bid to appease investors after announcing Apple’s sub-par financial results, CFO Luca Maestri said that the company would allow share repurchases for up to $90 billion. This resulted in an over 1% bump in share prices during after-hours trading on May 5, according to CNN.
But the news is not all bad for Apple.
Apple managed to surpass analyst expectations in iPhone sales, which brought in $51.3 billion compared to the expected $48.7 billion for a roughly 1.5% increase, according to The Wall Street Journal.
The iPhone performed well in several developing markets, including Latin America, the Middle East, Indonesia, and India, where Apple opened its first retail store last month.
As The Dallas Express reported, Apple has been gradually expanding its manufacturing processes in India while lessening its reliance on China.
Overall, the demand for higher-priced premium products like the iPhone Pro Max has remained high, offering a sign of resilience for the tech giant amidst ongoing economic uncertainty, according to The Wall Street Journal.
Two records were actually made in Q2 2023.
“We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” announced Apple’s CEO Tim Cook in a news release.
Sales for Apple’s services — including Apple TV+ and Apple Music — logged $20.9 billion for the quarter. The number of paid subscribers to these services has gone up 150 million compared to last year, totaling over 975 million, Maestri said during an analyst call, according to CNN.
With this stable generator of revenue, Apple might prove more resilient than its rivals in the tech industry who have recently posted huge losses in equity holdings this quarter.
The combined losses in equity investments reported by tech giants like Amazon, Microsoft, Uber, and Alphabet amount to approximately $17 billion, according to CNBC.