Originally published at: Apple Reports Record Q4 2023 Profits Despite 1% Revenue Drop - TidBITS
Foreign exchange headwinds and a relative scarcity of new products during the quarter flattened Apple’s revenue figures compared to its results from a year ago, although its profits were up 13%.
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Thank you, @mcohen for a very nice summary.
This is an impressive image
iPhone still dominates. And the Apple is doomed faction will point to this and say that once iPhone stops being cool, Apple is in serious trouble.
Not too worried about any of that myself, but the Mac raking in less than wearables to me is a bit alarming. There’s of course reasons for this specific to this quarter, but IMHO the whole Mac lineup hasn’t looked this good in a long time and yet, in terms of revenue it’s facing serious headwinds. There are those that say it’s because Apple is greedy and Macs are overpriced, especially the egregious mem/storage upcharge, but I don’t see how lowering that income would magically crank up Mac revenue. How many more Macs would Apple sell if that mem upgrade were $300 instead of $400?
One figure I do really wonder about. “Services” is often waved around as this hot new thing that sells more than Mac + iPad combined yada yada. But as we learned in the ongoing Google antitrust trial, Google pays Apple somewhere between $8-20B per year for making Google the default search. If you factor that out of the $22.3B services revenue it goes into, not a whole lot is left for claims such as “Ted Lasso is so great and making Apple so much money” or “Apple Music stands up to Spotify”. In fact, without that chunk of Google bribe (let’s assume it’s the $14B mean), Services would be relegated to about $8B. In other words 9% of revenue combined for Apple Music, Apple TV+, Arcade, Fitness/Sports yada yada and all that iCloud storage people are supposedly buying. But 9% is less than average Mac, more than average iPad. Not chump change for sure, and yet, while money people love to schmooze about services, it’s no better really than Mac or iPad. Both of which are often touted as “lackluster” by the same money people. Pfft.
Simon,
The revenues discussed in Michael’s article are quarterly revenues, so if Google pays $14B annually, the average quarterly number is $3.5B. Non-Google services revenue would be $18.8B, which I think damages the rest of your analysis.
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Ha! You’re absolutely right. I got confused by labels mentioning years, but it’s still quarterly data. You are right. 
And I stand corrected. Thank you.
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Also, I’m not sure why we’re criticizing Apple’s strategy for taking advantage of their screen real estate being worth a $14 billion rental charge for one small part of it.
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Man, does anyone still go to those meetings? 
I’m not sure that’s really true. For 2023, Apple posted $29.3 billion in Mac sales, ($7.7, $6.8, $7.2, and $7.6 billion). Sure, that’s a little less than 10% of Apple’s revenues for the year, but it’s still freakin’ $29.3 BILLION. Plus, those numbers are relatively stable, showing a constant demand rather than something spikes with new models or cyclical trends. And Apple pretty much always says that half of all Mac buyers are new to the platform. So from that perspective, the Mac seems like an extremely solid business, if not one that’s ever going to break out with stunning profits again.
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iPhone still dominates in sales. And the “Apple is doomed” faction will point to this and say that once iPhone stops being cool, Apple is in serious trouble. Not too worried about any of that myself, but the Mac raking in less than wearables to me is a bit alarming.”
PC sales have been declining across the board:
Jason Snell has done a year-end article looking at how 2023 as a whole stacked up for Apple.
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