Apple Services Revenue Rises 14% to New Record, iPhone Sales Drop Amid Weakness in China
Apple’s services business turned in double-digit growth for the first three months of 2024 — to reach a new record — but the tech giant’s core iPhone business suffered a decline and the company saw a continued sales drop-off in China.
The Apple Services segment generated $23.87 billion, up 14.2%, for the quarter ended March 30, topping analyst forecasts of $23.12 billion. For the June quarter, Apple expects to see double-digit growth in services similar to its rates in the two most recent quarters. The services segment includes subscription services such as Apple TV+, Apple Music, Apple Arcade and iCloud; the App Store, Apple Pay and Apple Card; advertising; and payments from Google for search. Apple last fall raised the price of Apple TV+ to $9.99/month in the U.S., up from $6.99 previously.
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Dragging down Apple’s results: Sales of iPhones, by far its biggest business line, fell 10.5%, to $45.96 billion. Sales in the company’s Greater China region, which includes Hong Kong and Taiwan, declined 8% in the period to $16.4 billion.
Overall, Apple came in just above analyst estimates. The company reported $90.8 billion in revenue, down 4.3%, and net income of $23.6 billion ($1.53 per share), a decline of 2.2%, for the March 2024 quarter. Wall Street expected the tech giant to post revenue of $90.04 billion and earnings per share of $1.50 for the period, which is its Q2 of fiscal 2024.
“Today Apple is reporting revenue of $90.8 billion for the March quarter, including an all-time revenue record in Services,” Apple CEO Tim Cook said in announcing the earnings. “During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks.”
On the call with analysts, he didn’t speak to how well the $3,500 Vision Pro headset has sold since it began shipping in February except to say he was “thrilled” to see enterprises purchasing the device to develop new applications, including for field service and training.
More than half of Fortune 100 companies have bought Apple Vision Pro units “and are exploring innovative ways to use it to do things that weren’t possible before, and this is just the beginning,” Cook said.
The company said Apple’s board authorized an additional program to repurchase up to $110 billion of the company’s common stock — the biggest buyback program in its history. It also declared a cash dividend of 25 cents per share, up 4%, payable on May 16. Apple had $162.3 billion in cash, cash equivalents and marketable securities at the end of the quarter.
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