Apple’s Q4 earnings report could have been an unmitigated disaster, considering the hatchet job the year 2020 has been on consumer spending, but the official numbers released last Thursday tell the story of a fourth fiscal quarter that was actually—luckily?—pretty meh overall for the tech giant. But a modest, pandemic-induced uptick in laptop and tablet sales was apparently not the good news our Wall Street overlords were looking for, and Apple still has the stock price to show for it.
According to the Q4 report, overall earnings were consistent with last year’s, with Apple reporting $64.7 billion in overall revenue this quarter—up slightly from the $64 billion it reported at this point in 2019. The biggest bomb was low numbers of iPhone sales, with $26.4 billion in iPhone revenue reported for Q4 of 2020, down from $33.4 billion at the same point last year—a slump that can likely be attributed to the fact that the Q4 reporting window had closed before the new iPhone 12 series had even been announced.
The other big takeaway from the report was dismal sales numbers in China, a former growth region for Apple that saw revenue dip by more than $3 billion this quarter. The slight underperformance was enough to displease Wall Street investors, with AAPL stock prices tumbling nearly 10% on Thursday in response to the Q4 report’s release. In the days since, the stock price has continued to dip, signaling a continued uneasiness among traders concerned with Apple’s underperformance.
But despite the prevailing anxieties, Apple’s Q4 report also had some bits of good news for the tech behemoth. iPhone sales aside, Mac revenue saw a fourth-quarter boost as homebound students stuck online due to covid-19 stocked up on laptops. In the fourth quarter, Apple reported $9.03 billion in Mac revenue alone, a major increase from the $7 billion in Mac revenue the company reported during the same period last year. For likely the same reason, iPad sales also spiked, accounting for about $6.8 billion of Apple’s total revenue this quarter for an overall increase of more than $2 billion since this time last year.
Another boon to Apple’s quarterly earnings was its services revenue, which surged to $14.5 billion this year in what CEO Tim Cook referred to in the Q4 report as a “September quarter record.” And even as the share price continues to dip, savvy consumers should be on the lookout for that growth in services revenue to continue to pick up steam in the next year or so, as Apple prepares to unveil a host of new subscription services, including Peloton-style guided workout plans and a range of Apple News, Apple Arcade, and iCloud bundles, in the coming weeks and months.