05 May 2023
If you are covering Apple’s Q2 results, please see comment below from Ben Barringer, equity research analyst at Quilter Cheviot:
“Apple’s Q2 numbers were a slight beat with revenues down three per cent, which should be viewed against a smartphone market which is down around 10 per cent demonstrating that Apple is taking market share. The real engine of growth is emerging markets – India, South-East Asia, Latin America and the Middle East.
“iPhone sales were up two per cent, representing 54 per cent of revenues with a focus on the Pro and Pro Max, while Mac and iPad sales were both weak driven by tougher macro and when compared to higher revenues last year as they introduced new products using their own M1 and M2 silicon chips. Services was up five per cent which is about 20 per cent of the business, with popular content on Apple TV, such as Ted Lasso and Shrinking.
“Overall, Apple has around two billion users now and around half of those have some sort of paid subscription with the firm. One fly in the ointment for Apple is AI where the scorecard reads ‘room for improvement’. Siri is not the world’s greatest voice assistant and it’s an area where they could do more.
“Forward guidance is in-line with these results, with next quarter likely to be a similar picture with reasonable stable margins.
“For investors, it is very hard not to have a position in Apple given its market cap. The debate is whether you view Apple as a tech company or a staple. Can you compare it with Proctor & Gamble, L'Oréal and Coca-Cola, or do you compare it to Microsoft?”
