Apple revenues in Q3 2024 (fiscal Q4 2024) grew 6% YoY reaching US$95 billion – a third quarter record. This was the second consecutive quarter of revenue growth for Apple. The growth was driven by both hardware and services, which grew 4% and 12% YoY respectively. This is the largest growth for hardware revenues in almost two years. At the same time, services revenue continues to reach record highs of almost US$25 billion. Services now comfortably captures one fourth of Apple’s total revenues.

Commenting on the results, Varun Mishra, Senior Analyst at Counterpoint noted, “Big positives for Apple during the quarter. iPhone 16 series was off to a slow start in some key regions and despite that Apple has achieved a record third quarter for iPhones in terms of shipments, revenues and ASPs. Emerging markets are becoming growth drivers in volume while at the same time the product mix towards the Pro series is helping bump ASPs. The premiumization trend continues to help Apple. Mac also continued its growth trajectory for 4^th consecutive quarter while iPad also grew all helped by better product mix. However, wearables, home and accessories segment continued to decline due to stringent competition across watch and TWS categories and waning demand of the Vision Pro.”

On services, Tarun Pathak, Director at Counterpoint Research noted, “Services continues to deliver solid results creating record revenues during yet another quarter. Apple Intelligence has now become available and will be expanded into multiple regions in 2024 and 2025, however, it is not a sales driver yet. Apple is likely to carefully observe consumer preferences and allow developers ample time to work with the beta version before a broader rollout. While Apple Intelligence continues to roll out, services like Apple Pay and iCloud continue to perform strongly. Apple has recently been more aggressive in expanding Apple TV+ both in terms of content as well as distribution strategies through partnerships. Services growth trajectory is likely to continue in the coming quarters.”

Source: Counterpoint Research Apple 360

Segment Analysis:

• iPhone revenues grew 6% YoY during the quarter with our preliminary estimates suggesting that ASP’s grew 2% YoY surpassing the US$900 mark for the first time in the September quarter. This was driven by the favorable mix of Pro series. While key markets like US and China experienced a YoY decline in shipments, markets like Western Europe, Latin America, India, Southeast Asia, Middle East Africa all showed growth.

• iPad revenues grew 8% YoY achieving a second consecutive quarter of growth. Last year there were no new model launches for iPads, which is also one of the reasons for YoY growth.

  • The new iPad Air continues to perform well in Q3 appealing to a wider demographic. The base model iPad benefited from several attractive promotions during the quarter.

  • There was waning demand for the new Pro OLED models following its initial surge in popularity.

  • iPad revenues would have grown more but the base iPad and iPad Mini launches were pushed to the December quarter and H1 2025, respectively.

• Mac revenues grew (2% YoY). MacBook Air continues to perform well. There will likely be more growth over the coming quarters due to new product launches and more price points with M4, M4 Pro, and M4 Max chips. Apple Intelligence is likely more appealing to consumers medium-term on Apple Macs driven by applications such as writing tools, email summaries, and other media applications.

• Wearables, Home and Accessories (WHA) revenues declined 3% YoY despite portfolio refreshes of both Apple Watch and AirPods. This was the fifth consecutive quarter of the YoY revenue decline in WHA. Apple Watch performed lower than expected. Vision Pro also continues to decline after the initial surge of demand during its launch quarter. It remains a niche product due to a very high price point and limited application ecosystem. However, Apple continues to re-invent the wearables category by adding new health features, which is a positive trend.

• Services continues to set new records for Apple. The increasing installed base is providing a solid platform for services growth—installed bases of all products rose in all regions. Longer-term, growth in emerging markets will be followed by higher services revenues. It is likely Apple will eventually monetize Apple Intelligence.