Apple services are making more cash than ever, but revenue shrank for the third quarter in a row

Apple’s financials continue to be in an ever-so-slight slump. Just as we saw the last two quarters, the company suffered minor declines in revenue in its fiscal Q3 2023 — but these are minor blips for a company that is still raking in absurd amounts of money every quarter. 

As has often been the case, revenue that Apple made from its Services segment (things like paid iCloud plans, Apple Music, AppleCare, the App Store and numerous other offerings) hit an all-time high of $21.2 billion. That’s the company’s second-largest product category behind the iPhone, and it grew eight percent year-over-year. But iPhone, Mac and iPad revenue all declined compared to a year ago, the same as it did last quarter.

In the case of the iPhone, that decline was slight: revenue of $39.7 billion in the quarter was down about two percent compared to a year ago. iPad (down 19.8 percent) and Mac (down 7.3 percent) sales declined more significantly. But given the fact that Apple hasn’t refreshed any iPad hardware since last fall, it’s not too surprising to see a drop there. Wearables (like the Apple Watch and AirPods) and accessories were another bright spot, as revenues grew a little over two percent, the only product category besides Services to do so. 

Overall, revenues of $81.8 billion represented a less than two percent drop year over year, while profits actually increased about two percent to $19.9 billion. 

As usual, Apple is holding a call with CEO Tim Cook at 5PM ET, and there’s more to discuss this quarter than usual. Beyond Apple’s normal product categories, this is the first earnings since the ambitious and wildly expensive Vision Pro headset was announced, so it’s likely investors may want to hear about how that new product is progressing. And there’s the ever-present talk of potential AI-related projects hanging out in the background, too. We’ll be updating this post with any details Cook shares on the call. 

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