Apple reported its earnings for the third fiscal quarter of 2022 on Thursday, and like many of its peers in consumer electronics, the company barely eked out growth over the same quarter last year. Overall revenue was up just 2 percent year over year at $83 billion.
The company’s services business, which includes everything from Apple Music to iCloud and AppleCare+, was the growth leader with 12 percent increased revenue compared to the same quarter last year. That’s for a total of $19.6 billion.
But the company still earns most of its money from other categories, none of which grew as quickly. The iPhone earned $40.67 billion during the quarter—just 3 percent more than last year. And all three of the company’s other categories were down against last year. The Mac fell 10 percent to $7.38 billion, the iPad was down 2 percent at $7.22 billion, and other products—including the Apple Watch, AirPods, and others—were down 8 percent to $8.08 billion.
Of course, none of this came as a surprise to most investors, given inflation, global supply challenges, and worries about a coming recession. In fact, Apple slightly beat analysts’ estimates going into the earnings report.
Apple CFO Luca Maestri described the current situation as “a challenging environment,” and CEO Tim Cook noted that the company is seeing inflation impacting its cost structure.
The company didn’t offer specific guidance for the next quarter, but Cook said in an interview with CNBC that he expects things to pick up a little bit in the September quarter, “despite seeing some pockets of softness.”
The company is expected to ship new iPhone and Apple Watch models later this year, and updated M2 Macs and iPads are also possibilities. There have been rumors Apple will introduce its newest product category—a mixed reality headset—by the end of this year, but some reports have indicated those plans may slip into 2023.
In light of the economic climate, Apple has joined many other tech and consumer electronics companies in declaring that it expects to slow hiring and act conservatively in the coming months.