24/7 Wall St. Insights
- Apple Inc. (NASDAQ: AAPL) posted mediocre results for its latest quarter.
- The iPad made only a very modest contribution to that showing.
- Also: Discover the next Nvidia.
Headlines claimed that the mediocre results from Apple Inc. (NASDAQ: AAPL) were only possible due to iPad sales. The iPad received a major upgrade in May. The announcement then said it would come in two sizes. It also received a more powerful processor called the M2.
Apple’s earnings show that the iPad made a very modest contribution. Apple’s overall revenue rose from $81.797 billion to $85.777 billion, an increase of $3.98 billion from the quarter a year ago. iPad sales were only a modest part of the jump. They rose from $5.791 billion to $7.162 billion, up $1.371 billion. That was hardly a home run.
The other contributor to the increase was Services. Services were supposed to eventually replace the iPhone as the top-line driver. That didn’t happen, and growth has slowed. Services revenue rose from $21.123 billion to $24.213 billion in the quarter a year ago, an increase of $3.19 billion.
The important news was that Apple broke out of several quarters of declining revenue, but not by much. The stock barely moved after the announcement, and that movement was down. Even a bit of excitement regarding Apple’s AI software launch did not create much enthusiasm.
Investors will have to wait until the next quarterly announcement to see how iPhone 16 sales do without the new AI operating system installed. Will people wait until that OS is available and delay purchases?
iPad sales didn’t help much because people were waiting for more significant news. That is 89 days away.
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