Apple’s revenue from Macs and wearables falls amid a downturn in the tech sector

It’s been a strong start to this year for Apple, and it continues to break records going forward. The company reported its financial results, with revenues of $83 billion. This is a 2 percent increase over the same period last year.

“We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category,” said Luca Maestri, Apple’s CFO. But profits fell as much as 11 percent, and while iPhone sales continued to grow, revenue from Macs and wearable devices dropped.

It’s worth noting that the number of Macs could increase next quarter. This is because the new Apple MacBook Air with the M2 chip was recently released and started shipping only this month. Given the devices the company plans to release in the fall, it’s also possible that consumers are in no hurry to buy new products and wait out the ongoing inflation.

“This quarter’s record results speak to Apple’s constant efforts to innovate, to advance new possibilities, and to enrich the lives of our customers,” said Apple CEO Tim Cook in the press release. The company’s CFO Luca Maestri also added “Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment.”

Tim Cook said during the company’s earnings call that the iPhone set a “June quarter record for both revenue and switchers to iPhone”. iPhone sales rose from $39.6 billion to $40.7 billion year over year. Asked about the impact of inflation on consumer demand, Cook said that while the macroeconomic situation had no clear impact on the iPhone, “Mac and iPad were so gated by supply that we didn’t have enough product to test the demand.” For the wearables, home and accessories categories, though, “we did some impact there that we would attribute to the macroeconomic environment,” he said.

Cook also mentioned how the company enjoyed the opportunity to welcome developers to Apple Park at this year’s WWDC, calling it “a reminder of the economic miracle the App Store represents.”

He also emphasized that “the iOS app economy supports more than 2.2 million jobs here in the United States and many more around the world.” Apple has prevented “nearly 1.5 billion dollars in fraudulent transactions,” Cook said, and stopped “over 1.6 million risky and vulnerable apps and app updates.”

Maestri said Mac revenue was $7.4 billion, “despite supply constraints.” The iPad install base hit a new all-time high this quarter, with more than half of subscribers becoming new users during that time. Meanwhile, revenue from wearable devices was $8.1 billion, down 8% from the same period last year, “as we faced foreign exchange headwinds, different launch timing for home and accessories products and supply constraints, as well as the overall macroeconomic environment,” Maestri said.

Nevertheless, the company set a new historical record for “installed base of devices in the category.” More than two-thirds of the people who bought an Apple Watch during the quarter were new to the company, Maestri noted. Apple also had a strong performance in paid subscription products, with more than 860 million paid subscriptions for all the services it offers.