Apple Store shop front

Apple published its financials for the third quarter of 2023 – its fiscal Q4 – yesterday.

They revealed that the company’s quarterly revenues were down 1% year-on-year to $89.5bn. However, the breakdown between products (hardware) and services is interesting.

Apple’s product sales fell by 5.3% to $67.18bn last quarter, but its services revenues grew by 16.3% to $22.31bn. That’s not quite bigger than the combined sales of Macs, iPads, wearables, HomePods and other accessories (that was $23.38bn) but not far off.

There was an interesting sentence from CEO Tim Cook in Apple’s earnings call. “We achieved all-time revenue records across App Store, advertising, AppleCare, iCloud, payment services, and video, as well as the September quarter revenue record in Apple Music,” said Cook.

Why is this interesting? Because it means last quarter wasn’t an all-time revenue record for Apple’s music services. And that prompted us to go back to previous earnings calls to compare what was said:

  • Q4 2022 (Apple’s fiscal Q1): “We also set records in many Services categories, including all-time revenue records for cloud services, payment services and music”
  • Q1 2023 (Apple’s fiscal Q2): “We achieved all-time revenue records across App Store, Apple Music, iCloud and payment services”
  • Q2 2023 (Apples’ fiscal Q3): “In addition to the all-time records Tim mentioned earlier, we also set June quarter records for advertising, App Store and music”

And now a September quarter revenue record for Apple Music. That suggests that Apple’s music revenues in the last two quarters were smaller than the all-time record it set in Q1 2023, although still greater than their comparable quarters last year.

It’s something to keep an eye on, anyway. And of course, Apple Music’s annual revenues may still have increased.

Apple hasn’t announced an official figure for Apple Music subscribers for several years, although Midia Research estimated that they grew from around 78.6 million in June 2021 to around 84.7 million a year later.

Meanwhile, music publishing industry body the NMPA recently revealed that Apple Music had 32.6 million subscribers in the US.

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Music Ally's Head of Insight