Apple Inc. (NASDAQ:AAPL) Q3 2023 Earnings Call Transcript

Sidney Ho: Okay. That’s fair. Maybe as a follow-up is related to — you talked about WWDC, where you actually introduced Vision Pro there. Clearly, a very big announcement there. How should we think about the revenue ramp related to the Vision Pro? Is there any catalysts that we should be thinking about that will drive an inflection of that product?

Tim Cook: Yes. There’s enormous excitement around the Vision Pro. We’re excited internally. Everybody that’s been through the demos are blown away, whether you’re talking about press or analysts or developers. We are now shipping units to the developer community for them to begin working on their apps. And we’re looking forward to shipping early next year. And so we could not be more excited with that. I’m using the product daily. And so we’re not going to forecast revenues and so forth on the call today, but we’re very excited about it.

Operator: We will take our last question from Krish Sankar with TD Cowen.

Krish Sankar: I have two of them as well. Number one, on iPhone, Tim, you mentioned about the record number of switchers in the quarter. I’m kind of curious how to think about, given the weak macro and consumer spending, how is the replacement cycle for iPhone? Is it similar, longer, shorter versus prior years? And can you talk a little bit about the demand linearity of iPhone during the June quarter? And then I have a follow-up.

Tim Cook: Switchers were a very key part of our iPhone results for the quarter. We did set a record. We set a record in Greater China, in particular, and it was at the heart of our results there. And we continue to try to convince more and more people to switch because of our — the experience and the ecosystem and — that we can offer them. And so I think switching is a huge opportunity for us. In terms of the upgrade cycle and so forth, it’s very difficult to estimate real time what is going on with the upgrade cycle. I would say, if you think about the iPhone results year-over-year, you have to think about the SE announcement in the year ago quarter, the iPhone SE announcement in the year ago quarter. And so that provides a bit of a headwind on the comp. But as Luca said, as he talked about how we’re viewing Q4, the September quarter, we see iPhone accelerating in Q4.

Krish Sankar: Got it. Very helpful, Tim. And then my final question is on your retail stores, you obviously have a very large retail footprint and many of your stores seem to have been open for over a year now. How is the foot traffic there? And how do you think about sales or the retail trends in the June quarter and implications for the back half of this year on a seasonality basis?

Tim Cook: I’m sorry, are you talking about our retail stores?

Krish Sankar: Yes, yes, your retail stores.

Tim Cook: Yes. The — if you look at retail, it’s a key part of our go-to-market approach, and it will be so key and such a competitive advantage with Vision Pro. It will give us the opportunity to launch a new product and demo to many people in the stores. And so it has many advantages in it. And we continue to roll out more stores. As you know, we just opened 2 in India last quarter. We’re — there’s still a lot of countries out there that don’t have Apple stores that we would like to go into. And so we continue to see it as a key part of how we go to market and love the experience that we can provide customers there.