What just happened? Apple just turned in one of its worst quarterly earnings reports in years. For the three-month period ending December 31, 2022, Apple posted quarterly revenue of $117.2 billion which is down more than five percent from the $124 billion generated in the year-ago period.

Apple’s big moneymaker, the iPhone, saw revenue dip to $65.8 billion in Q4 compared to $71.6 billion during the same period a year earlier. The Mac category brought in $7.7 billion, down from $10.9 billion year over year, and the wearables / home / accessories category fell to $13.5 billion from $14.7 billion.

iPad sales increased year over year, from $7.2 billion in Q4 2021 to $9.4 billion this past holiday season. Similarly, Apple’s services category went from $19.5 billion to $20.8 billion.

CEO Tim Cook acknowledged the challenging environment it and others continue to navigate, but focused on the positives in Apple’s accompanying press release. Cook highlighted the fact that Apple now has more than two billion active devices globally. Furthermore, the services business set an all-time revenue record in Q4.

In an interview with CNBC, Cook pointed to three key factors that hurt Apple’s results: production issues in China affecting the iPhone 14 Pro and iPhone 14 Pro Max, a strong dollar and the overall macroeconomic environment.

Share value in Apple is up 3.7 percent in early morning trading on the report.

Apple did not offer guidance for the coming quarter. In fact, the iPhone maker hasn’t provided guidance since the start of the pandemic in 2020. Analysts told CNBC they expect Apple to generate around $98 billion in Q1 2023.

Apple recently brought back a version of its full-size HomePod smart speaker complete with updated internals and a $50 lower price point. The company’s long-rumored AR/VR headset could also break cover this year, perhaps at Apple’s annual WWDC with a fall launch window. New iPhones are pretty much a given for September but don’t expect to see updated iPads this year as those are reportedly being saved for 2024.

Image credit: Hugo Agut Tugal, Zhiyue