Three Interesting Charts for Apple's 4Q23
Hello everyone. Welcome to Monday and a new week. We will continue our Apple 4Q23 earnings review.
Like last quarter, we will focus on three charts that go a long way in summarizing Apple’s current financial trends. We will cover the granular takeaways from Apple's 4Q23 earnings call in tomorrow’s update.
As a reminder, if you have questions about Apple’s earnings, please send them way. The questions can be covered as we proceed through the earnings review.
Three Interesting Charts for Apple's 4Q23
1) HW vs. Services Gross Profit Growth
Over the years, we have had various opportunities to compare key financial differences between Apple HW and Apple Services.
The former is heavily influenced by upgrading trends. For Apple to report HW revenue growth, the company needs to replace all of the revenue from the prior period just to be in a position to then grow. For products like iPhone, upgrading is responsible for approximately 75% of revenue. The percentage is lower – closer to 50% - for Mac and iPad.
During the pandemic, Apple device upgrading was strong as work from home and online/distance learning drove interest in new(er) devices. This benefit extended to companies paying for their employees to have the latest computing devices (at home).
Over the past 12 to 18 months, device upgrading has slowed across the industry.
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