Apple's Services Grew Despite Drop in iPhone, Mac, and iPad Sales

However, overall sales dipped by 1% as compared to last year, and revenue in the company’s most iconic hardware products like iPhone, Mac and iPad lines were all down from a year earlier – causing Apple shares to drop more than 2% after the market closed.

Here’s how Apple performed against Refinitiv’s consensus estimates and year-over-year:

- Earnings per share: $1.26 compared to the estimated $1.19.

- Total revenue: $81.8 billion, down by 1% from the estimated $81.69 billion.

- iPhone revenue: $39.67 billion, a 2% drop from the projected $39.91 billion.

- Mac revenue: $6.84 billion, 7% less than the $6.62 billion predicted.

- iPad revenue: $5.79 billion, a significant 20% decline from the anticipated $6.41 billion.

- Other Products revenue: $8.28 billion, a slight 2% rise from the estimated $8.39 billion.

- Services revenue: $21.21 billion, an 8% increase from the forecasted $20.76 billion.

- Gross margin: 44.5% compared to the estimated 44.2%.

Despite a slowdown since December 2022, the company's latest report could ease concerns about the services sector. Although Apple doesn't provide detailed breakdowns of its services, it shared several optimistic data points about this business segment. Services include advertising, AppleCare, cloud services, digital content, and payment services.

They also noted a growth in advertising, App Store, and music revenues, although they only set records for the June quarter. Apple also reported over 1 billion paid subscribers, doubling in three years and increasing by 150 million in the last year. 

Thus, Apple's future strategy may likely focus on balancing its hardware sales with growth in its services and "Other Products" sectors.