Apple execs tout Mac success following Intel transition but warn of Q4 double-digit drop in revenue

Even though Mac revenue took a slide in Apple’s Q3 2023 earnings, CEO Tim Cook and CFO Luca Maestri said the business is stronger than ever. Notably, Apple’s comments come as Apple completed its full transition to Apple Silicon during the quarter, replacing the Intel-powered Mac Pro with a new version powered by the M2 Ultra.

Apple had originally planned to complete the transition to Apple Silicon within one year of its first announcement. The company first revealed its plans to ditch into in favor of its own chips at WWDC 2020, and the first Apple Silicon-powered Macs were released later that same year.

Based on Apple’s initial timeline, the Apple Silicon transition would have been completed by the end of 2021, but this ultimately didn’t happen. Instead, the Mac Pro with Intel inside stuck around until this year when Apple officially discontinued the Intel version and replaced it with the Apple Silicon version.

Speaking to investors during Apple’s Q3 earnings call yesterday, CFO Luca Maestri touted Apple’s successful move to Apple Silicon in the Mac. He also pointed out that “almost half” of Mac buyers during the quarter were new to the product altogether.

Mac generated $6.8 billion in revenue, down 7% year over year. We continue to invest in our Mac portfolio, and this past quarter, we were pleased to complete the transition to Apple silicon for the entire lineup. This transition has driven both strong upgrade activity and a high number of new customers. In fact, almost half of Mac buyers during the quarter were new to the product. We also saw reported customer satisfaction of 96% for Mac in the U.S.

Tim Cook echoed that sentiment in his own prepared remarks:

We are proud to have completed the transition of our entire Mac lineup to run exclusively on Apple Silicon. We are also excited to have introduced the new 15-inch MacBook Air during the quarter, the world’s best 15-inch laptop and one of the best Macs we’ve ever made. And we launched two new powerhouses in computing, Mac Studio with M2 Max and M2 Ultra, and Mac Pro with M2 Ultra, which are the most powerful Macs we’ve ever made.

These comments likely came as an effort to stave off concerns about declining Mac revenue. For Q3 2023, Mac revenue came in at $6.84 billion, down from $7.38 billion in the same quarter a year prior. That revenue number was also slightly below analyst expectations for the quarter.

But Apple is still cautious about what to expect from the Mac business in Q4 2023. Maestri warned investors that both Mac and iPad revenue will decline by “double digits year-over-year” in the September quarter.

We expect the revenue for both Mac and iPad to decline by double digits year-over-year due to difficult compares, particularly on the Mac. For both products, we experienced supply disruptions from factory shutdowns in the June quarter a year ago, and were able to fulfill significant pent-up demand in the year-ago September quarter.

Now that the Apple Silicon transition is complete, the next milestone for the Mac will be the M3 series of chips. The M3 family will use a new 3nm fabrication process which should dramatically improve both performance efficiency. The first Macs with M3 chips inside are rumored to include the 13-inch MacBook Air, the 13-inch MacBook Pro, and the 24-inch iMac – with an expected announcement sometime in October.

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