Apple's Halo Effect and Twin Engines of Growth Shield Underwhelming Results

Apple was the last Big Tech company to release its results. I find Apple's results underwhelming as it was the only Big Tech that registered a revenue decline.

Like every other PC makers, Apple's Mac has experienced significant slowdown in demand - Mac segment saw a 31% drop in revenue. I covered this previously and said that it would not impact Apple's performance too much as it was the second lowest revenue contributor to Apple.

Indeed, Apple's total revenue only declined by 3%, thanks in part to the growth of its two largest revenue segments: iPhone and Services sales, which increased by 2% and 5% respectively.

On the other hand, iPad sales were disappointing, with a 13% drop, while the Wearables, Home, and Accessories segment saw relatively flat growth.

Apple emphasized its strong iPhone sales and record-breaking revenue from its services division to draw attention away from the overall revenue decline. Nonetheless, with the iPhone contributing more than 50% of Apple's revenue, analysts were understandably focused on this segment, and fortunately, Apple's sales exceeded expectations in this area.

But neither was it growing exceptionally. iPhone is a matured product and Apple has been mainly relying on retaining the current users by selling them new models at higher prices.

Things are finally changing as Apple has ventured into India. I have discussed this previously - besides diversifying its manufacturing base to reduce geopolitical risk, it was also about capturing a huge consumer market for its iPhones.

Apple's efforts to expand into new markets have already yielded positive results, as evidenced by its 15% revenue growth in Asia Pacific, excluding China and Japan. This growth is particularly encouraging, as it suggests that even markets with lower GDP per capita can afford Apple's products. With this potential for growth, Apple's expansion into new markets may continue to pay off in the coming years.