4 August 2023
If you are covering Apple’s latest financial results, please find below a comment from Ben Barringer, equity research analyst at Quilter Cheviot:
“Apple’s results were somewhat disappointing, especially in the light of how the other tech players are doing. Revenues were down 1%, with particular weakness in developed markets as the company is clearer buffeted by the macroeconomic headwinds. The story was a little more positive in emerging markets and got a nice little boost from China rebounding as it continues its emergence from the Covid pandemic.
“Macbooks, computers and iPads were the biggest area of weakness as hardware struggled, although it should be noted that the wearables division is doing well and has more to come with Vision Pro expected next year.
“The main takeaway from these results is that Apple is transitioning somewhat to be more of a services company, although hardware will always play its part and what it is known for. Areas such as the iCloud, Apple Pay etc. are doing very well and now account for 26% of revenues. This is growing at 8% a year so is becoming increasingly important to its fortunes. It also now has over $10bn in its high yield savings account – a great achievement in a short space of time and highlights its potential as a financial services behemoth. We suspect we will see more of this sort of thing as the company finds its feet in that market.
“That said, Apple is guiding to a similar decline in growth for the next quarter. Other tech giants have navigated the uncertain environment much more efficiently and as such for investors we prefer them over Apple.”
