Apple Soars on Services Growth and Emerging Markets Expansion Despite Product Sales Declines
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Apple has doubled revenue and increased EPS for 10 consecutive years, leveraging its top-tier brand and investing in services and emerging markets like China and India.
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Services revenue grew 16% YoY in FY 2023, offsetting declines in product revenue, driven by price hikes and growth in AppleCare, iCloud, App Store, Apple Music, and advertising.
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Mac sales declined 34% YoY but could see a recovery with the PC industry poised for 6% growth in 2023 per Goldman Sachs. New MacBook Pros, iMacs, and M3 chips target professional users.
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Apple is expanding in China with 56 retail stores and claimed top 4 selling phones in urban China last year. India market share grew from 1% in 2019 to a projected 6% by end of 2023.
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Despite revenue declines, Apple achieved 13% EPS growth in Q4 2023. Valuation is compelling versus peers, and $77.5B in buybacks boosted EPS growth by 3 percentage points.