Sidebar Sidebar
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.

Apple's Q3 2024 Earnings Call Takeaways

MacRumors

MacRumors

macrumors bot
Original poster
Apr 12, 2001
68,225
39,026


Apple today held an earnings call for the third fiscal quarter of 2024 (second calendar quarter), with Apple reporting its best June quarter to date, with revenue higher than expected. Apple CEO Tim Cook and Apple CFO Luca Maestri provided some insight into Apple's performance, iPad sales, services growth, AI plans, and more.

Apple-Logo-Cash-Feature-Yellow.jpg

We've highlighted the most interesting tidbits from the Q3 2024 earnings call.

iPhone Performance

Apple CEO Tim Cook said that the iPhone 15 models did better than the iPhone 14 models. The install base hit an all-time high during the June quarter.

As for the iPhone 16, Apple CEO Tim Cook said that the company is "very excited" about Apple Intelligence and the level of value that Apple will provide to users. Cook said that Apple Intelligence presents "another reason for a compelling upgrade."

Apple Intelligence

On Apple Intelligence, Cook said that Apple can't wait to see what kind of amazing things developers do with Apple Intelligence. Cook expects that developers will adopt Apple Intelligence in their apps on a broad basis, with features that are applicable to many types of apps.

He confirmed that Apple is planning a staggered rollout of the Apple Intelligence features. There are some functions that will come over the course of the year, and languages beyond U.S. English will not be available at launch.

ChatGPT integration with Siri is expected before the end of the calendar year.

Apple is investing more in Artificial Intelligence and Machine Learning, with plans to increase that on a yearly basis.

iPad Sales

Apple saw a sharp increase in iPad sales thanks to the launch of the M4 iPad Pro and the M2 iPad Air during the quarter. iPad revenue was at $7.2 billion, up 24 percent from $5.8 billion in the year-ago quarter.

Services Revenue

Apple saw a steep increase in services revenue at $24.2 billion, up from $21.2 billion a year ago and a new all-time revenue record. Paid subscriptions hit an all-time high, and Apple has more than one billion paid subscriptions across services. Apple set new records in advertising, cloud, and payment services.

Apple CFO Luca Maestri said that Apple is seeing continued growth in the level of engagement that customers have with its ecosystem. Maestri also said that Apple is doing a "very good job" improving the quality of its services and improving the amount of content available. Apple plans to continue to add new Apple TV+ and Apple Arcade content.

Other Product Revenue

iPhone revenue dropped one percent ($39.3B), Mac revenue was up two percent ($7B), and Home, Accessories, and Wearables fell two percent ($8.1B).

Digital Markets Act

Maestri said that Apple is continuing to discuss its DMA compliance with the European Commission. Apple has seen "a good level of adoption" from developers on the changes, and in general, results for the services business and for the App Store have been "pretty good until now."

Maestri once again reiterated that the App Store is responsible for seven percent of the total revenue that Apple earns in the European Union.

Cook said that Apple is working to understand the regulatory requirements it is subject to before introducing Apple Intelligence in the European Union. Apple Intelligence features will not be available in the EU when iOS 18, iPadOS 18, and macOS Sequoia launch.

September Quarter

Apple said that it expects September quarter revenue to grow year over year at a rate similar to the June quarter. Services revenue is expected to grow double digits, similar to the rest of this year. Gross margin is expected to be 45.5 and 46.6 percent.

Mac will have a challenging compare from a year ago, according to Maestri, as there was the full quarter impact of the 15-inch MacBook Air in fall 2023. There have been rumors that we could see refreshed M4 MacBook Pros before the end of the year, but if Apple is expecting Mac revenue to fall, that may not happen.

Article Link: Apple's Q3 2024 Earnings Call Takeaways
 
Article Link
https://www.macrumors.com/2024/08/01/apple-q3-2024-earnings-takeaways/
  • Like
  • Love
Reactions: citysnaps and SFjohn
Digital Markets Act

Maestri said that Apple is continuing to discuss its DMA compliance with the European Commission. Apple has seen "a good level of adoption" from developers on the changes, and in general, results for the services business and for the App Store have been "pretty good until now."
Click to expand...
But people on MR told me that there would be few adopters because very few iOS users are interested in 3rd party app stores
 
  • Like
  • Haha
  • Disagree
Reactions: Lequon Robinson, Chazak, wbeasley and 5 others
sw1tcher said:
But people on MR told me that there would be few adopters because very few iOS users are interested in 3rd party app stores
Click to expand...

Atif Malek, Citi: Luca, the services growth momentum seems very strong. Are you seeing any impact from changes made to comply with the DMA rule?

Maestri: Well, as you know, we’ve introduced some changes to the way we run the App Store in Europe already in March, and we have seen a good level of adoption from developers on those changes.


I don't think you can interpret this answer as a confirmation that a lot of developers are going for third-party stores.
 
  • Like
Reactions: cbaca51, Lequon Robinson, Chazak and 13 others
The iPhone 15 doing better than the iPhone 14 did doesn't mean anything. The iPhone 14 was the biggest bore fest iPhone of all time imo, you can find as much difference between the 13 and 14 as you can find between the just released Midnight HomePod mini and the other HomePod minis.

Don't get me wrong, I think the iPhone 15 is a wonderful phone and big upgrade from the 14. But the iPhone 14 is 99,98% an iPhone 13.
 
  • Like
  • Disagree
  • Haha
Reactions: Lequon Robinson, Chazak, michaelnugent and 10 others
“Cook said that Apple can't wait to see what kind of amazing things developers do with Apple Intelligence.”

translation: shareholders beware, we don’t have a killer app or know when, or if we will get one.
 
Last edited:
  • Like
  • Disagree
  • Haha
Reactions: fahlman, Chazak, michaelnugent and 9 others
dogstar said:
Imagine how much better it would have been if they hadn't had wasted all that energy, time & money on the vision flop pro?
Click to expand...
I've seen this line of reasoning a lot. How small do you think Apple's R&D department is‽ Given the size and budget of the R&D, they can develop many things simultaneously. Designing a pair of VR goggles isn't going to slow anything else down!
 
  • Like
Reactions: Lequon Robinson, fahlman, Chazak and 5 others
currentinterest said:
Cook: If you look at Wearable for the trailing 12 months, it’s grown almost $40 billion.
Not too bad is it?
Click to expand...

It's pretty bad because it shows growth was organic, through the launch of AirPods Pro (2nd Gen), Watch 8, 9, Ultra, Ultra 2, and Beats. Vision Pro basically had no contribution. Apple might as well have put that effort towards accelerating their modem project or a foldable.
 
  • Haha
  • Like
Reactions: Col4bin and NetMage
The best June quarter ever, huh? How is that possible considering all of the things we hear from posters in the comment section who hate Tim Cook and just about everything Apple has done under his tenure?

Jobs passed away a while ago now. If Cook were as bad as many people in the comments section claim then it’s either a miracle that Apple is making these kinds of massive profits or maybe, just maybe, Cook isn’t as bad as some of you claim with his failures not as massive as some make them out to be.

It’s not like everything Jobs put out was a hit and whoever succeeded him was never going to fill those giant shoes but Cook has done a pretty admirable job for shareholders which means he’s bringing in profits, which means people are buying Apple’s products. Let’s not forget that Jobs hand picked Tim. There was a lot of talent to choose from and he picked Tim Cook for a reason.
 
Last edited:
  • Like
  • Love
  • Disagree
Reactions: Lequon Robinson, michaelnugent, Table Top Joe and 14 others
JPack said:
It's pretty bad because it shows growth was organic, through the launch of AirPods Pro (2nd Gen), Watch 8, 9, Ultra, Ultra 2, and Beats. Vision Pro basically had no contribution. Apple might as well have put that effort towards accelerating their modem project or a foldable.
Click to expand...
It's worse than that. Wearables had a huge bump during covid due to enhanced Watch sales when everyone started buying Pelotons and all that. If you look through the quarterly data, it's obvious that AVP did not sell many units, or there were massive returns, which would lower net sales.

The only other issue in wearables immediately preceding the AVP launch was the Masimo patent affair which affected Watch S9 (and Ultra) sales, but that presumably just delayed purchasing.

AVP is not contributing yet to any meaningful rev growth.

See Financial Data section here:

Investor Relations - Apple

investor.apple.com investor.apple.com
 
  • Like
  • Haha
Reactions: Col4bin, JPack and NetMage
JPack said:
Wearables down 2% even with Vision Pro.

Tells you quite a lot that Cook didn't share a single sales stat about that product.
Click to expand...

How often do you run out and buy a new Apple wearable? I certainly don’t do it every year nor every other year. Not even close. The iPhone on the other hand, just about every two years since it came out with once where I bought one in back to back years (for Touch ID) and once where I waited three (went from the 12 Pro to the 15 Pro). Outside of that, ever two years. I’ve only owned 3 Apple Watches (the original, the 4 and the 7) and 3 sets of AirPods. The AirPods 2, the AirPods Pro and the AirPods Pro 2.

I think for most people wearables will be on an upgrade cycle closer to the iPad or Mac than they are to the iPhone. That’s the nature of the product category and a lot of people upgraded their wearables or first bought them during Covid so I’d say if the introduce the Apple Watch 10 with some meaningful features unlike the 8 and 9 and next year we get the AirPods Pro 3 you’ll see warbles growing again.

As for the Vision Pro we’re talking about a product that probably won’t have a million units manufactured in a calendar year. For a company like Apple if they sold every one they do manufacture that’s not going to move the needle much. They need to sell millions of devices to do that which was never going to happen based on the issues they had manufacturing the device and its selling price.

Why people can’t wrap their heard around the concept of a company with the kind of billions upon billions in cash reserves that Apple has putting a product out there they think at best may be a hit 5 - 10 years from now is so tough to grasp. They made a bet that in 5 to 10 years they’ll be able to get the form factor down to AR glasses running a version of visionOS that’s been out there for long enough that there are plenty of apps and media content waiting that can run on it.

Either it works out or it doesn’t but if AR glasses ever do rival or overtake the smart phone as one’s primary computing device Apple won’t be caught flat footed. They better have other products they’re working on as well because sooner or later the next big thing will happen. None of us know what it’ll be but Apple would be negligent if they weren’t looking at every possibility and vetting it even if they never release it in the form of a product you can buy.
 
Last edited:
  • Like
  • Love
Reactions: pianophile, mjs916, crazytrain and 5 others
Macaholic868 said:
How often do you run out and buy a new Apple wearable? I certainly don’t do it every year nor every other year. Not even close. The iPhone on the other hand, just about every two years since it came out with once where I bought one in back to back years (for Touch ID) and once where I waited three (went from the 12 Pro to the 15 Pro). Outside of that, ever two years. I’ve only owned 3 Apple Watches and 3 sets of AirPods. The AirPods 2, the AirPods Pro and the AirPods Pro 2.

I think for most people wearables will be on an upgrade cycle closer to the iPad or Mac than they are to the iPhone. That’s the nature of the product category.
Click to expand...
Some people like upgrading the Watch rather often. Every other year for me. I don't use any of the airpod stuff, but love the annual updates to the Watch. Everyone likes different things.
 
  • Like
Reactions: mjs916
Macaholic868 said:
How often do you run out and buy a new Apple wearable? I certainly don’t do it every year nor every other year. Not even close. The iPhone on the other hand, just about every two years since it came out with once where I bought one in back to back years (for Touch ID) and once where I waited three (went from the 12 Pro to the 15 Pro). Outside of that, ever two years. I’ve only owned 3 Apple Watches and 3 sets of AirPods. The AirPods 2, the AirPods Pro and the AirPods Pro 2.

I think for most people wearables will be on an upgrade cycle closer to the iPad or Mac than they are to the iPhone. That’s the nature of the product category.
Click to expand...

Many people I know replace their AirPods about every 12-18 months due to battery degradation, earwax buildup, and loss. This makes them more like consumables. Watch is more like 2-3 years.
 
  • Like
  • Haha
Reactions: mjs916, Stormshadow, idrewuk and 1 other person
The fall is imminent:
No attention to customer desires, only satisfy investors.
Jumping on expensive AI fad paying a lot to 3rd parties when it is a party trick in the current way Apple is “implementing” it.
Overconfident in no competition. True in USA, but the world will impose the reality on iPhone in less than 5 years.
 
  • Haha
  • Like
Reactions: michaelnugent, dmiannay, Col4bin and 7 others
Who wants AI when you can’t even wake to Spotify?, or edit a mistyped phone number, or remove the huge notch, or make a call with a long press of the phone app, etc. iPhone is stuck in the past and Apple is putting a new paint using the trendy color without substance. 15PM is my las iPhone for a while.
 
  • Haha
Reactions: dmiannay and idrewuk
BelgianChoklit said:
The iPhone 15 doing better than the iPhone 14 did doesn't mean anything. The iPhone 14 was the biggest bore fest iPhone of all time imo, you can find as much difference between the 13 and 14 as you can find between the just released Midnight HomePod mini and the other HomePod minis.

Don't get me wrong, I think the iPhone 15 is a wonderful phone and big upgrade from the 14. But the iPhone 14 is 99,98% an iPhone 13.
Click to expand...
You could say that except for USB Type C, the iPhone 15 and 15 Plus is almost what the iPhone 14 and 14 Plus should have been... Or you could say, they [iPhone 15 and 15 Plus] are mostly what the iPhone 14 Pro and 14 Pro Max are minus the telephoto...
 
Bungaree.Chubbins said:
I've seen this line of reasoning a lot. How small do you think Apple's R&D department is‽ Given the size and budget of the R&D, they can develop many things simultaneously. Designing a pair of VR goggles isn't going to slow anything else down!
Click to expand...
As a stockholder and a life long techie (since Microcomputers were invented) I have to assume that there were other wise techie Apple employees who knew the VPro would be a disaster but the company wouldn’t listen to them. That doesn’t bode well for the future.

Are you really telling me you don’t think that Apple would currently be better off if at the time GPT3 was released (and we all realized what AI could become) Apple had put everyone on the VP Pro team onto the Apple Intelligence team?

They might have an actual working product today if they did.
 
Last edited:
You must log in or register to reply here.
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.
Top Bottom
Back