Sometimes , it ’s all about expectations . Apple ’s second fiscal quarter of 2023results was a bit like a movie with bad news of mouth – but then you see it , and it wasn’tthatbad . In fact , maybe it was … good ? Sort of ?
Or , to put it another means , when the economy looks trembling , it ’s dreadfully nice when one of the most valuable company in the world generates $ 94.8 billion in tax revenue and a $ 24.2 billion gain – even if it ’s downslightlyfrom the same quartern a year ago . After ringing a lot of warning bell shape three months ago , Apple ’s business still seems pretty solid . If this is what a decrepit quarter looks like , Apple ’s as blue - chippy as a low - scrap fellowship could be .
As always , amid the numbers and Apple ’s traditionalphone call with financial analyst , there are a few nuggets to be glean about what Apple ’s doing and what Apple CEO Tim Cook and CFO Luca Maestri are thinking . I ’m just here to chew gum and mine nugget , and I ’m all out of glue .
A sigh of relief
This was a sigh - of - rilievo kind of quarter . Apple ’s entire revenue was off only three percent from last year , give it the secondly - big Q2 in Apple history . The iPhone , Apple ’s prime tax revenue source , was slimly up – and set all - time records in Mexico , Indonesia , the Philippines , Saudi Arabia , Turkey , and the UAE . Apple ’s second - largest budget line , Services , was also up slightly and set a unexampled all - clock time disk .
The Phone is fix sales records in several international markets .
Dominik Tomaszewski / Foundry
The rest of the patronage was assorted . While Apple always tries to cart out some superlatives for the Mac , iPad , and wearables product segment , they were few and far between this one-fourth . It ’s become well-defined that the Mac and iPad are victims of their own recent success , at least when it come to sales trend : both merchandise sold well during the early days of the pandemic , and the Mac also get a Brobdingnagian sales boost due to the arrival of Apple Si . But with those days behind them , both product have to live up to the “ elusive comparability ” of last yr ’s second quarter , where the first Apple silicon MacBook Pros and the M1 iPad drove sales that this year ’s simulation simply could n’t pair .
I would n’t worry about it too much , iPad and Mac fans . Both ware are sell at layer never seen before the last couple of long time , and there ’s a lot of increment in the installed base of both . Apple also enunciate that more than one-half of last quarter ’s iPad sale were to first - time iPad buyer , which shows the increment potential of the platform .
Looking at emerging markets, especially India
After Tim Cook ’s trip to India last month , there was a lot of talk about India during the analyst call . And the news was good , with Apple setting a quarterly record and carry strong double - digit increment . Cook called it “ a major focus ” with “ unlikely ” vibrancy . Most significantly , Cook cited the rapid growth of a key client cornerstone for Apple products : “ There are a luck of people coming into the center class ” in India , he articulate , “ and I really feel that India is at a tipping point , and it ’s great to be there . ”
If this sounds familiar , it ’s because Cook said a lot of similar thing about China a decade ago . But when demand specifically to compare the potency in India to that of China in the yesteryear , Cook demurred – a politically impertinent conclusion . “ I imagine each land is different and has its own journey , ” he say . Every country is a flake , but vast - universe snowflakes with rapidly growing middle classes are Apple ’s favorite .
Beyond India , though , Apple throw some love at other egress markets where it ’s doing well . “ It was a big quarter for issue markets in general , despite the [ currency ] headwinds , ” Cook said . “ We ’re assign movement in a number of these grocery and really see , particularly given our low share and the moral force of the demographics , a great opportunity for us in those market . ” In other dustup , in many of these markets , Apple ’s overall market plowshare and presence are so pocket-sized that there ’s almost unlimited room for growth . And Wall Street psychoanalyst sure enough beloved hearing about outgrowth potential .
A little bit about AI
seasoned analyst Shannon Cross of Credit Suisse asked Cook if he had anything to say about the blistering matter of the technical school industry , artificial word . And Cook had an interesting , if roundabout , answer .
“ I do think it ’s very important to be deliberate and thoughtful in how you approach these thing , ” Cook enjoin . “ And there ’s a bit of issues that need to be sorted , as is being verbalize about in a number of different place . But the potential is certainly very interesting . And we ’ve obviously made enormous progress integrating AI and machine learn throughout our ecosystem , and we ’ve weaved it into product and characteristic for many years , as you probably know . you’re able to see that in things like fall espial and crash detection , and ECG . These things are not only great characteristic , but they ’re also pull through masses ’s lives out there . And so it ’s absolutely singular . And so we watch AI as immense , and we ’ll continue weaving it in our products on a very thoughtful base . ”
While Apple is often portray as being “ behind on AI ” because it does n’t have its own Siri chatbot in beta , the truth is that the company has been using automobile - learning - based technology in all kind of corners of its platform , from sensing element analysis on the Apple Watch to face- and object - sensing in the Photos app . As for other stuff – I’m look at you , Siri – it ’s intemperate to tell if Apple ’s lose the game or is just sustain everything confidential until the moment it spring a new AI - driven Siri 2.0 on us all . But “ weaving it in our product ” is not a speculative way to account what Apple has done , thus far , with AI .
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Horribles on parade
So what have we learned ? Mostly , things are weird , and we ’ve all been through a quite a little recently , but Apple is gon na be all proper . On Thursday , Tim Cook cart out a young phrase to depict our weird geological era : “ parade of horribles , ” which in reality sounds kind of fun in a Willy Wonka sort of agency .
But it ca n’t liken to the “ cocktail of headwind ” that Apple faced nine month ago . And when Cook introduced the phrase , he did so to emphasize that Apple was doing okay : “ Despite this parade of horribles … we find good about what we are and what our plans are . ”
Sometimes you ’re one of the horribles ; sometimes you ’re the guy with the heather at the remnant of the parade , sweeping up after the horribles . And all the while , you get the smell that Apple ’s been watching the parade from its shaded luxury box .
