Interactive Investor

ii view: Apple tops one billion paid subscriptions

Quarterly sales have now fallen for three consecutive quarters with its stock market value recently falling back below $3 trillion. Buy, sell, or hold?

15th August 2023 15:32

by Keith Bowman from interactive investor

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Apple logo and phone user 600

Third-quarter results to 1 July

  • Revenue down 1% to $81.8 billion (£64.6 billion)
  • Adjusted earnings per share up 5% to $1.26
  • Dividend unchanged from the previous quarter at $0.24 per share
  • Returned over $24 billion (£19 billion) to shareholders, up from $23 billion in Q2

Chief Executive Tim Cook commented:  “We are happy to report that we had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone.”

ii round-up:

Apple (NASDAQ:AAPL) designs, makes and markets mobile products, personal computers and media devices. It also sells a variety of related software, services, peripherals, and third-party digital content and applications via iTunes and its App Store.

For a round-up of these latest results announced on 3 August, please click here.

ii view:

Coming to the stock market in 1980, Apple today is the largest US company by stock market value. Competing against devices from the likes of Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc Class A (NASDAQ:GOOGL)-owned Google, the Dow Jones 30 company continues to generate its largest slug of sales from its core iPhone product at close to half, followed by Services at around just over a quarter. Next comes Wearables, Home, and Accessories at around a tenth, with the balance of 15% split roughly evenly between Mac PC and iPad sales. 

For investors, a consumer cost-of-living crisis, including higher borrowing repayments, is likely hindering sales. The West’s relationship with China, Apple’s third-biggest market away from the Americas and Europe, is now more strained following the Ukraine war. An estimated future price earnings (PE) ratio of close to 30 is comfortably above the 10-year average, suggesting the shares are not necessarily cheap, while environmental concerns and the required use of resources in making its products also warrants consideration.   

More favourably, the tying in of customers using its services on their devices generates high customer loyalty with paid subscriptions now reaching over one billion. The move to 5G phones and faster data download speeds does give reason for customers to upgrade, potentially to Apple's new pending iPhone 15 models. Investments in artificial intelligence are being made, while its strength of brand and geographical diversity are not to be forgotten. 

For now, and while its exposure to pressured consumer spending should not be ignored, a consensus analyst estimate of fair value sat at almost $200 per share is likely to keep existing shareholders at least staying put. 


  • Diverse geographical markets
  • Strong customer loyalty


  • Dependency on iPhone sales
  • Strained relations between the West and China

The average rating of stock market analysts:


These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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