However, Apple stated that two-thirds of the customers who purchased Apple Watches in the fourth quarter were new to the product. Many are skeptical of Smart watches and believe they only have a niche market. ![]() This was driven by the new Apple Watch and Air Pods pro. Wearables, Home, and Accessories also generated solid growth of ~5% year over year ($9.65 billion). Therefore the comparable between last year is not sufficient and management alluded to a solid quarter for the iPad. I discovered this decline was mostly driven by a timing issue, as new iPads were launched in September last year but October in 2022. iPad revenue was the only loser for Apple in the September quarter as revenue dipped by ~9% year over year to $7.17 billion. ![]() Apple makes ~12.8% of its Revenue from the Mac and thus it's a fairly significant (and iconic) part of the business. The company had some supply chain issues in the June quarter, thus some of those delayed sales acted as a tailwind into the fourth quarter. This was driven by the launch of the MacBook Air with its new M2 processor which has 18% higher CPU performance for the equivalent power consumption. Sales of the Mac hit an all-time high at $11.5 billion, up a staggering 25% year over year. Apple's market share (blue bars below) has fluctuated between 30% in 2016 to 65% in 2020 and thus looks to be in a similar range, with a slight uptrend in peaks as the years go by.Īpple/Smartphone Market Share. But Apple's software has an edge in my opinion, as the company develops its Apps under greater control. The next alternative is Samsung (30% market share) of which its Galaxy models have similar features. Consumers choose Apple because of the brand and the "hands-off" approach to purchasing and using the device. However, I believe the reason the iPhone continues to sell strong is because consumers who are already part of the Apple Ecosystem will choose to upgrade their phones naturally. This includes "small refinements" in terms of photography, battery life, and GPU performance, hardly a game-changer. For more technical details, many review websites state, the upgrades over the iPhone 13 are "mostly iterative". The latest iPhone 14 is not exactly revolutionary and the phone was even the butt of various memes going around the internet which basically alluded to the fact the phones are very similar. The large skew towards the iPhone has always been a risk for Apple, as the revenue has historically popped on new iPhone releases. This was driven by solid revenue growth for the iPhone which makes up 47% ($42.6 billion) of total revenue. Products revenue was $71 billion, up 9% year over year and a record for the fourth quarter. Apple does have a series of FX hedges in place, which looks to have offset the impact, coupled with solid growth.Īpple Sales by Region (Q4 Earnings Report) Given this international revenue equates to ~56% of total revenue, the impact was surprisingly minimal for the company. Any international revenue (outside of the U.S) will be impacted by the strong U.S dollar when Apple reports. This is followed by Greater China ($15.5 billion), Japan ($5.7 billion) and the Rest of Asia Pacific ($6.4 billion). However, the business makes approximately one-quarter of its revenue ($22.8 billion) from Europe. As you can see from the table below, Apple makes 44% of its revenue ($39.8 billion) from the Americas. This was despite a 600 Basis points impact from foreign exchange, which was influenced by a strong US dollar. Revenue was $90.1 billion which beat analyst forecasts by $1.37 billion and increased by 8% year over year. Therefore in this report, I'm going to break down the September Quarter for Apple in granular detail and reveal its valuation, let's dive in.Īpple Generated solid financial r esults for the fourth quarter of fiscal year 2022. This is an essential competitive advantage given the high inflation environment. ![]() Consumers are willing to pay more for an Apple product just because it is Apple. The company has a strong brand, which enables significant "pricing power" and higher margins than competitors such as Samsung. Given the tough economic backdrop Apple has continued to perform strong beating both revenue and earnings estimates for the fourth quarter of the fiscal year 2022. Since the passing of Steve Jobs, CEO Tim Cook has continued to execute strong as Apple has diversified into the high-margin Services business and released iconic products such as Air Pods. While its Mac computers are iconic and highly regarded as best-in-class technology. The company has the greatest market share of the smartphone market. Apple ( NASDAQ: AAPL) is arguably the greatest consumer electronics company that has ever existed.
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