Apple’s Q1 2024 Earnings Call Takeaways

Apple today held its earnings call for the first fiscal quarter of 2024 (fourth calendar quarter of 2023), with Apple CEO Tim Cook and Apple CFO Luca Maestri sharing details on Apple’s performance, recent product sales, services growth, and more.

We’ve highlighted the most interesting takeaways from the earnings call.

EU App Ecosystem Changes

Maestri and Cook were asked about possible economic results from the changes that are being made to the App Store in the European Union. Maestri said that the EU represents just seven percent of Apple’s global ‌App Store‌ revenue, while Cook said that impact it is impossible to determine right now because Apple finds it difficult to predict what customers and developers will choose.

“We’ve really focused on privacy, security and usability,” Cook said. “And we’ve we’ve tried our best to get as close it in the past in terms of things that people love about our ecosystem, but we’re going to fall short of providing the maximum amount that we could supply because we need to comply with the with the regulation.”

Vision Pro

Apple CFO Luca Maestri said that several big companies are planning Vision Pro apps for customers and employees, including Walmart, Nike, Vanguard, Stryker, Bloomberg, and SAP. “From everyday productivity to collaborative product design to immersive training, we cannot wait to see the amazing things our enterprise customers will create in the months and years to come,” said Maestri.

Cook said that Apple is “incredibly excited about the enterprise opportunities” with Vision Pro. Walmart, for, example, has a “very cool” merchandising app. There are companies making collaboration and design apps, there are field service applications, apps for control center/command center work, and more. “Really all over the map,” said Cook.

“We couldn’t be more excited about where things are right now,” Cook said. “This has been multiple years of efforts from so many people across Apple and really took a whole of company effort to bring it this far.”

AI

Tim Cook said that Apple is spending a “tremendous” amount of time and effort on artificial intelligence, and that details on its AI work will be shared later this year.

In terms of generative AI which I would guess is your focus, we have a lot of work going on internally, as I’ve alluded to before. Our MO, if you will, has always been to do work and then talk about work and not to get out in front of ourselves. And so we’re going to hold that to this as well. but we’ve got some things that we’re incredibly excited about, that we’ll be talking about later this year.

Services

Apple’s Services category set an all-time revenue record at $23.1 billion, up from $20.7 billion in the year-ago quarter. Paid subscriptions grew double digits year-over-year.

Apple set all-time revenue records in advertising cloud services, and payment services and video, along with December quarter records in the ‌App Store‌ and AppleCare.

Wearables

The Wearables, Home and Accessories category saw a drop in revenue, coming in at $12 billion, down from $13.4 billion last year.

Mac and iPad Sales

Mac sales were about flat at $7.8 billion (compared to $7.7 billion last year), but iPad sales were way down as Apple released no new models in 2023. ‌iPad‌ revenue was $7 billion, down from $9.4 billion last year.