03 November 2023
If you are covering Apple’s fourth quarter results, please see comment below from Ben Barringer, technology research analyst at Quilter Cheviot:
“The quarter for Apple was a fraction soggy, with revenues down 1%. iPhone was up 3%, representing about half of revenues, with Mac and iPad very weak reflecting tough comparisons versus last year, but also the fact that consumers are spending on food, travel and experiences as opposed to discretionary spending on consumer goods.
“Wearables were down 3% as we await the launch of the Vision Pro headset in 2024, which will only be available in stores so that Apple can show people its capabilities. Services, which includes Apple Pay and iCloud, represents 25% of Apple revenues and continues to be strong, up 16%.
“Even though Apple is buying-back $20bn of stock per quarter, the cash generation of this business means net cash remains at around $50bn.
“Overall, normalising for the slightly shorter quarter ahead (13 weeks rather than 14 weeks), Apple is guiding for broadly flat revenues. Given the uncertain macro environment, we’re looking at a U-shaped recovery as opposed to hockey stick.
“The big issue for Apple is whether it will lose share in China. Until now Huawei hasn’t been able to make a phone, allowing Apple to gain share in China over the last three to five years. With Huawei now having the Mate Pro phone on the market, the worry is that Apple’s market share in China will reverse. According to Apple they are still gaining share in that market, but time will tell whether that can continue into the Christmas period.
“Overall Apple is expensive for its growth rate, and we like other things in tech more right now.”
