Apple’s installed base now exceeds 2 billion active devices, CEO Tim Cook said during Thursday’s earnings call. Although revenue in Apple’s first quarter fell $6.7 billion short of last year’s, the continued growth helped the company achieve what Cook called “a truly incredible milestone.”
Apple: 2 billion devices!
Aside from bragging rights, the steady uptick of Apple devices in use means one thing: more money for Cupertino. Hardware sales aside, 2 billion devices represent an almost unfathomable opportunity to hook users on Apple subscriptions.
Cook years ago made a shrewd strategic decision to concentrate on Apple services as a way to offset slowing iPhone sales. That bet continues to pay off in big ways: Apple services hit an all-time record of $20.8 billion in revenue last quarter. That high mark served as one more reason for Cupertino to remain optimistic about the future.
In Cook’s opening remarks during Thursday’s call, he revealed that just seven years after passing 1 billion active devices, Apple doubled that figure to 2 billion. He cited Apple’s “deep commitment to innovation, incredible customer loyalty and satisfaction, and a large number of switchers” as reasons for the ongoing success.
Apple CFO Luca Maestri continued that theme in his own opening remarks. “Our installed base of active devices grew double digits and achieved all-time records in each geographic segment and in each major product category,” Maestri said, citing “extremely strong” customer satisfaction and loyalty as well.
Not enough for AAPL investors
While the number of active devices continues to climb, the rate of Apple’s overall growth has slowed down. Although iPad revenue grew 30% last quarter, Mac revenue fell a whopping 29%. And iPhone revenue dropped 8% compared to the same period last year.
Apple’s first quarter came up short compared to the company’s previous holiday quarter. Cook cited three reasons in the call: foreign exchange headwinds, COVID-19-related challenges and “a challenging macroeconomic environment, from inflation to war in Eastern Europe.” These challenges may have contributed to the delayed introduction of the Mac mini and MacBook Pro.
Despite warning investors of a challenging quarter in November, the decline in revenue shook Apple investors.