Apple experienced a slowdown in hardware sales among its flagship Mac computers and iPhone smartphone devices, but the decline in sales was partially offset by a jump in its services division, the company said on Thursday.
The revelation was made as part of Apple’s second fiscal quarter earnings, which cover the first three months of the calendar year. Apple’s overall revenue for the quarter was $94.8 billion, down 3 percent compared to the second quarter of 2022, in part due to lower electronic sales.
Sales of Apple computers, phones, tablets, watches and other hardware cooled to $73.9 billion during the quarter, down from $77.5 billion reported in 2022. The first three months of the year typically see slower sales as consumers pull back on spending after the lucrative holiday shopping season.
Apple’s iPhone line continued to be its biggest moneymaker, with more than $51.3 billion in sales during Q2 2023, up from $50.7 billion last year. Mac sales declined to $7.12 billion, off about $3 billion compared to 2022.
That said, people who did get Apple computers, phones and tablets for Christmas are taking full advantage of the various Apple-branded services offered natively through those devices, including Apple Music, Apple Fitness, Apple TV Plus and Apple News, among others. Sales from its services division brought in $20.9 billion, up from $19.8 billion reported in 2022.
Unlike other companies, Apple doesn’t report direct subscriber numbers for its services division, which includes Apple TV Plus, its direct-to-consumer streaming television service. Apple TV Plus recently began offering Major League Soccer and Major League Baseball games. Interest was also spurred by the third season of the hit comedy “Ted Lasso,” which started during Apple’s second quarter.
“We are pleased to report an all-time record in services and a March quarter record for iPhone despite the challenging macroeconomic environment, and to have our installed base of active devices reach an all-time high,” Tim Cook, the CEO of Apple, said in a statement on Thursday. “We continue to invest for the long term and lead with our values, including making major progress toward building carbon neutral products and supply chains by 2030.”
Luca Maestri, Apple’s CFO, said the company’s overall business performance “improved compared to the December quarter,” with the company able to return more than $23 billion to shareholders over the last three months.
“Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $90 billion for share repurchases,” Maestri said. “We are also raising our quarterly dividend for the eleventh year in a row.”