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June 16, 2024

Apple Ends 2023 with Slowest Revenue Growth in Over 20 Years

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Dec 31, 2023

Apple had a rocky 2023, facing slowing iPhone sales, supply chain issues, and growing economic uncertainty. While the company maintained its leadership position in key markets, it struggled to match the growth seen in previous years.

iPhone Sales Decline as Consumers Cut Spending

After over a decade of strong revenue growth driven by iPhone sales, Apple saw iPhone revenues decline 15% year-over-year in 2023 – the longest slide in over 20 years. This was largely blamed on consumers cutting back spending amid high inflation and fears of a recession.

The year started off strongly, with the launch of the iPhone 14 series in September 2022 seeing initial strong demand. However, as 2023 progressed and economic conditions deteriorated, iPhone sales slowed significantly. Apple even cut production targets multiple times through 2023.

iPhone Revenue Change 
2022: +9%
2023: -15%

This revenue decline saw Apple stocks underperform other tech giants in 2023. While stocks like Microsoft and Google parent Alphabet grew over 20%, Apple shares fell nearly 20% on the year.

New Products like Ultra Watch Struggle to Offset iPhone Declines

Apple did see strong growth in some areas like Mac computers and its services business. However, this wasn’t enough to offset the large iPhone revenue hit.

The company released products like the new Ultra Apple Watch Edition and second-generation AirPods Pro in 2023. But these new gadgets failed to drive substantial incremental revenue given their still niche market share.

Meanwhile, tablets and wearables both saw declining sales through the year. This highlighted that even Apple’s most loyal customer base pulled back spending as inflation reduced real incomes.

Supply Chain Issues Add Further Headwinds

On top of weakening demand, Apple also faced supply chain disruptions through 2023. COVID lockdowns in China and other events often constrained production.

Short supplies of key components like chips and displays restricted Apple’s ability to meet even the reduced demand. Wait times for new Mac and iPad models often stretched into months rather than weeks.

This supply/demand imbalance led to Apple carrying over $10 billion more inventory than usual by the end of 2023. Reducing this excess stock will be a priority heading into 2024.

Outlook for 2024 Remains Uncertain

Given the still clouded economic outlook, analysts remain cautious on Apple’s growth prospects for 2024. If high inflation persists and causes a full-blown recession, iPhone sales could see further declines.

However, if the economy stabilization and demand recovers, Apple could see a return to revenue growth. Much will depend on how broader macro conditions evolve over the coming year.

Apple still holds an industry-leading brand and loyal customer base. If the company can drive more regular upgrade cycles for devices like the iPhone 14 Pro series, it can reaccelerate revenue expansion.

Continued growth in services like Apple TV+, Apple Music, and iCloud will also become an increasingly important earnings buffer. So while Apple faces near-term headwinds, its future remains bright.

In 2023, the company clearly stumbled after over a decade of strong growth. But analysts expect Apple will learn from this experience and return even stronger in the years ahead.

AiBot

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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