Apple Revenues in Q3 Were $89.5 Billion, Roughly Flat With Last Year

Apple reported today that it earned a net income of $23 billion on revenues of $89.5 billion for the quarter ending September 30. Revenues were down 1 percent from the same quarter one year ago, which I’d call flat or even. But Apple noted that iPhone revenues were the highest ever for the quarter, indicating that the new iPhone 15 family is off to a strong start.

“Today Apple is pleased to report a September quarter revenue record for iPhone and an all-time revenue record in Services,” Apple CEO Tim Cook said. “We now have our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon-neutral Apple Watch models, a major milestone in our efforts to make all Apple products carbon neutral by 2030.”

Leaving aside the controversy around that carbon-neutral claim, Apple’s iPhone and Services businesses were the only that grew in the previous quarter: Mac, iPad, and Wearables, Home, and Accessories all delivered less revenues than they had a year ago.

The iPhone remains Apple’s crown jewel, of course, with $43.8 billion in revenues in the quarter, up 2.8 percent year-over-year (YOY). The iPhone represented 49 percent of Apple’s revenues. That’s actually up from last year when the iPhone represented 47.3 percent of Apple’s revenues in Q3 2022.

Apple’s Services business was again its second biggest, with $22.3 billion in revenues, up 16.3 percent YOY. Services is now over half as big as the iPhone by revenue.

As noted, Apple’s other businesses all shrank compared to the year-ago quarter, but each performed strongly. The Mac delivered $7.6 billion in revenues, down 33.8 percent. The iPad came in at $6.4 billion, down 10.2 percent. And Wearables, Home, and Accessories outperformed them both with $9.3 billion in revenues, down 3.4 percent.

And maybe that’s the real story here. Despite its understandable attempts to diversify its product offerings, Apple is still very much the iPhone company. The iPhone delivers 49 percent of Apple’s revenues directly, but Services and Wearables, Home, and Accessories wouldn’t exist without the iPhone and so one might make the case that as much as $75 billion of Apple’s revenues—about 84 percent overall—come directly and indirectly from that one product. In this way, Apple is a lot more like Google than it would like to admit: Over 71 percent of Google’s revenues are from a single product as well, in this case advertising.

Put another way, Microsoft’s revenues in that same quarter were $56.5 billion, and while the iPhone by itself fell short of that number, the overall iPhone ecosystem outperformed all of Microsoft once again. It’s a sobering comparison given that Microsoft is the world’s second-biggest company in the world by market capitalization. Second only to Apple, of course.