Sales of Apple’s desktop and laptop computers have cratered during the fourth quarter of 2023, dropping by 34% when compared with the same quarter of last year. But despite the continued drop in sales of Mac hardware, Apple remains optimistic about its future relevance, thanks largely to an increase in iPhone sales and service spending.
A 34% drop in sales year-on-year is a big drop for any company, but especially one as large as Apple. This quarterly drop is also the fourth decline in a row of year-on-year sales, but it’s worth putting those numbers into context. The sales of Macs in Q4 2023 added up to a staggering $7.614 billion, for a total of $29.357 billion across the entire year. That represents a drop of 34% and 27% respectively, but keep in mind that the year before was one of the largest sales years for Macs, and Q4 of 2022, the direct comparison for these latest sales numbers, was the most successful quarter for sales of Macs ever.
"In Mac, revenue came in at $7.6 billion, down 34% year-over-year from the prior year's record quarter," said chief executive of Apple, Tim Cook, on the earnings call. "This was due to challenging market conditions, as well as difficult compares against the supply disruptions and subsequent demand recapture we experienced a year ago."
Apple’s success and failure likely have the same root: Apple’s M-series processors. Last year saw an enormous expansion in the sales of specifically M1-equipped Macs, and given the life cycles of processors, it was unlikely that many people who bought an M1 Mac last year were likely to be looking to upgrade this year.
However, Apple has more routes elsewhere, as noted during the call. While iPad sales are similarly down, iPhone sales and service users are up. While iPhone revenue fell slightly, services benefited from an increase in active devices, with numbers rising to two billion.
Of course, while large elements of this report were negative, it’s important to note the highly optimistic tone held by Cook throughout the call. While revenue and sales may have taken a small hit this year, Apple is going nowhere.