Apple Revenue Drops 1% but Tops Wall Street Expectations

The results were the latest indication that tech’s biggest companies have found their footing after last year’s downturn. Last week, Facebook’s parent company, Meta, and Google’s parent company, Alphabet, reported double-digit growth in profits driven by a rebound in digital ad sales. Microsoft posted a record quarterly profit behind a surge in cloud-computing sales.

The tech industry limped through much of 2022 because of weak digital ad, e-commerce and computer sales. The downturn led Meta, Alphabet, Microsoft and Amazon to lay off thousands of workers and spurred companies across Silicon Valley to cut back on perks such as free laundry services for employees.

Though Apple avoided layoffs, it is now dealing with how much the pandemic turbocharged its business. Sales of iPads and Macs exploded as people began working from home, but new purchases of tablets and computers have sputtered over the past year. During the three months ending in June, the company said iPad sales decreased 20 percent, to $5.79 billion, and Mac sales declined 7 percent, to $6.84 billion.

The company was able to weather declines with continued growth in App Store and watch sales. The company’s services business, which includes subscriptions to Apple Music, App Store sales and Apple Pay, posted $21.21 billion in sales, an 8 percent increase from last year. The wearables business, which includes Apple Watch and AirPods, reported that sales rose 2 percent, to $8.28 billion.

Apple will continue to lean on its existing businesses for the bulk of sales in the coming years. In June, the company unveiled its first major new product since 2014: high-tech goggles that blend the real world with virtual reality. But the $3,500 device, called the Vision Pro, won’t go on sale for another year. It is projected to sell fewer than a half million units, according to analysts, a fraction of the roughly 200 million iPhones the company sells annually.

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