India key area of strength for Apple, says Tim Cook; iPhone maker posts strong double-digit growth in the country

Apple CEO Tim Cook said emerging markets like India “have been a very key area of strength” for the firm, as the iPhone maker hit highest revenue for December quarter, with strong double-digit growth in the country.

Apple’s growth in India comes amid a 13% drop in net sales in Greater China. However, Cook said he remains “very optimistic about China over the long term”.

Globally, Apple reported an increase in revenue and profit in the first quarter (Q1) of FY24, ended December 30, 2023, driven by sales from iPhone and services.

Apple’s Q1 net profit surged to $33.9 billion—up 13.1% compared with the same period in the previous fiscal year. Revenue increased to $119.6 billion as opposed to $117.2 billion in the year-ago period.

“During the December quarter a year ago, two unique factors affected our results. First, we had an additional week in the quarter. And second, we had COVID-related factory shutdowns that limited iPhone supply. We estimate that the net impact of these two factors resulted in a 2 percentage point headwind to our revenue performance this quarter," said Luca Maestri, CFO of Apple.

iPhone and services revenue

Apple’s flagship smartphones have been the driving force behind the company’s sales and, in the first quarter, iPhone sales significantly contributed to the firm’s revenue. iPhone and services revenue helped to offset the decline in iPad, wearables, home, and accessories sales.

iPhone revenue rose 6% to $69.7 billion in the first quarter from $65.8 billion in the year-ago period.

Last September, the tech giant revealed its latest smartphone lineup, including the iPhone 15 Pro, iPhone 15 Pro Max, iPhone 15, and iPhone 15 Plus. “The iPhone 15 lineup has earned glowing reviews and been embraced by customers,” Cook said.

Meanwhile, revenue from services set an all-time revenue record of $23.1 billion—up 11% year-over-year—with paid subscriptions growing double-digits annually.

Apple’s installed base has now surpassed 2.2 billion active devices, according to Cook.

Revenue from Mac products grew marginally to $7.8 billion—witnessing a “return to growth, despite one less week of sales this year”.

“This represents a significant acceleration from the September quarter when we faced a challenging compare due to the supply disruptions and subsequent demand recapture we experienced a year ago,” Maestri explained.

Apple’s iPad sales fell 25% annually, and the wearables, home, and accessories category dipped 11% compared to the previous fiscal year. “iPad faced a difficult compare because during the December quarter last year, we launched the new iPad Pro and iPad 10 generation, and we had an extra week of sales,” noted Maestri.

Overall, sales from Apple products amounted to $96.5 billion, marginally higher from the $96.4 billion reported in the year-ago period.

Apple’s mixed reality headset Vision Pro, launched in June last year, will be available in the company’s stores for customers in the US starting February 2, with expansion to other countries later this year.

Outlook

In the March quarter of the previous year, Apple replenished channel inventory and met substantial pent-up demand arising from constraints. It estimates that this influence contributed nearly $5 billion to the total revenue for that quarter.

“When we remove this impact from last year’s revenue, we expect both our March quarter total company revenue and iPhone revenue to be similar to a year ago,” Maestri said, adding that, for Apple’s services business, it expects a similar double-digit growth rate to what it reported in the December quarter.

Apple has not provided revenue guidance since 2020 citing uncertainty.