Apple announced its revenue results for the third quarter of fiscal year 2024 and broke a record with $ 85.8 billion in revenue. The “Apple revenue” report met investors’ expectations with 5 percent year-on-year growth. However, stagnation in iPhone sales and a decline in revenue in China caused Apple shares to fall slightly in after-hours trading.
iPad saves Apple’s revenue balance by closing the iPhone gap
Apple’s iPhone sales fell from $39.67 billion in the same quarter last year to $39.30 billion this year. Revenue in China fell 6.3 percent to $14.7 billion. CEO Tim Cook said iPhone models are still the best-selling models in “urban China” but acknowledged the challenge of competing with Huawei and other smartphone makers.
So how was Apple still able to achieve an overall revenue growth of 5 percent? Much of this was driven by significant increases in services and iPad revenue. Apple rolled out major iPad updates in the third quarter of 2024 and consumers responded positively. iPad revenue was $7.16 billion, up 24 percent.
Services, which includes services such as Apple TV+ and Apple Music, increased by 14 percent and the growth trend in this area continued. Among other product categories, “Wearables, Home and Accessories” (which includes products such as AirPods and Apple Watch) fell 2 percent to $8.1 billion during the quarter, while Mac sales rose 2 percent to nearly $7 billion.
Apple noted that a very large percentage of both Apple Watch and iPad buyers this quarter were first-time buyers, suggesting that the market is not yet saturated for these devices. Tim Cook highlighted Apple Intelligence in his investor call. This is the full suite of generative AI features first introduced at the 2024 WWDC event and coming this fall with iOS 18.1. Apple expects Apple Intelligence to boost sales of the latest and most expensive iPhone models, as it will not work on devices prior to last year’s iPhone 15 Pro.
Cook also shared his excitement for Apple Vision Pro, noting that developers have released more than 2,500 native spatial apps. He emphasized his satisfaction with the product but did not provide specific information on sales figures for the device.
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