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Apple Reports Quarterly Revenue of $90.8 Billion for Q2 2024

Last quarter, Apple reported revenue of $119.6 billion, which included the holiday season and the first full quarter of iPhone 15 sales. Although Apple hasn’t provided financial guidance since the COVID pandemic, the company warned investors to expect a $5 billion year-over-year drop in revenue for its second fiscal quarter. However, the actual Q2 results were better than expected.

Today, those earnings are out and Apple reported Q2 revenue of $90.8 billion. As Apple reminded investors last quarter, Q2 2023’s revenue numbers were unusually high due to pent up demand for the iPhone 14 Pro and Pro Max, which were in short supply during the company’s first quarter of 2023 due to COVID-related factory shutdowns.

According to Apple CEO Tim Cook:

“Today Apple is reporting revenue of $90.8 billion for the March quarter, including an all-time revenue record in Services,” said Tim Cook, Apple’s CEO. “During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks. We’re also looking forward to an exciting product announcement next week and an incredible Worldwide Developers Conference next month. As always, we are focused on providing the very best products and services for our customers, and doing so while living up to the core values that drive us.”

Going into today’s earnings call, the consensus among Wall Street analysts was that Apple would earn 90.37 billion an expected decrease that would a little less than the projected decrease cited by the company during its last earnings call. However, Apple beat both Wall Street expectations and its guidance.

The iPhone remains the cornerstone of Apple’s revenue. However, with sales down in China, analyst concern over whether Apple will incorporate AI into its products this year, and regulatory and antitrust pressure in the US and EU, the company’s outlook for the remainder of 2024 and into 2025 is more uncertain than ever.

Apple Changes How the Core Technology Fee Works and Confirms that Its Alternative Business Terms Will Apply to iPad Apps This Fall

One of the most controversial aspects of Apple’s response to the EU’s Digital Markets Act (DMA) was the introduction of a Core Technology Fee (CTF), which must be paid by developers who opt into Apple’s alternative business terms. Today, in a post on its developer website, Apple announced changes to the CTF and regarding the treatment of iPadOS, which was added to Apple’s DMA compliance obligations earlier this week.

The problem was that the CTF as originally conceived applied to all apps, including free apps. If a developer offered a free app and had first annual app installs of over 1 million installations, they would owe the €0.50 per installation fee, regardless of the fact they earned no income from the app. The fee, as proposed, would likewise be a problem for developers with other sources of income that weren’t enough to pay the CTF.

Today, Apple made two changes to the way the CTF works:

  • First, no CTF is required if a developer has no revenue whatsoever. This includes creating a free app without monetization that is not related to revenue of any kind (physical, digital, advertising, or otherwise). This condition is intended to give students, hobbyists, and other non-commercial developers an opportunity to create a popular app without paying the CTF.
  • Second, small developers (less than €10 million in global annual business revenue*) that adopt the alternative business terms receive a 3-year free on-ramp to the CTF to help them create innovative apps and rapidly grow their business. Within this 3-year period, if a small developer that hasn’t previously exceeded one million first annual installs crosses the threshold for the first time, they won’t pay the CTF, even if they continue to exceed one million first annual installs during that time. If a small developer grows to earn global revenue between €10 million and €50 million within the 3-year on-ramp period, they’ll start to pay the CTF after one million first annual installs up to a cap of €1 million per year.

The first change should take care of the free app scenario regardless of its popularity. The second change is designed to transition small businesses into paying the CTF. The first time a business with less than €10 million of global annual revenue crosses the CTF threshold, they won’t pay the fee. They will, however, have to start paying the fee up to a €1 million cap if the business’ global annual income grows to between €10 million and €50 million in that 3-year period. If revenue exceeds that range, the cap on the CTF presumably would not apply.

In the same post, Apple confirmed that the same EU rules that apply to iOS will begin to apply to iPadOS this fall and that a download of an app on both iOS and iPadOS will only count as one annual installation for CTF purposes.

Apple Introduces Three of the Distinguished Swift Student Challenge Winners

Earlier this week, Federico and I interviewed two of the Swift Student Challenge winners on AppStories, which was a lot of fun. A new feature of the 2024 competition was the addition of Distinguished Winners. As Apple explains it in a press release published today:

Out of 350 winning submissions, 50 students have been named Distinguished Winners for building app playgrounds that stand out for their innovation, creativity, social impact, or inclusivity. These 50 students have been invited to a three-day in-person experience at Apple Park that includes tailored programming and the special event at this year’s Worldwide Developers Conference (WWDC), where they’ll join like-minded creators from all over the world.

Apple’s press release includes profiles of three of the Distinguished Winners: Elena Galluzzo, a college student from Canada, Dezmond Blair, from Canton, Michigan, and Jawaher Shaman, who is studying at the Apple Developer Academy in Riyadh, Saudi Arabia.

Elena Galluzzo’s winning app is an assistant for seniors:

Galluzzo designed Care Capsule to be an all-in-one assistant for elderly people. She used Apple’s machine learning framework Create ML to build a chatbot that analyzes interactions with the user to deduce whether they are experiencing loneliness or depression. The app also lets users track their medications, connect with community resources, and keep a record of positive memories.

Dezmond Blair, who attended the Apple Developer Academy in Detroit, built MTB XTREME, an app that

…puts users behind the handlebars of a mountain bike, offering a 360-degree view of the trails around them.”

Finally, Jawaher Shaman created an app called My Child to help people with speech conditions:

My Child tells Shaman’s story through the eyes of a child who stutters, and features characters inspired by her father and grandfather. The app guides users through exercises that help slow down their breathing and prepare them for real-life experiences like reading a story in class. Shaman used AVFAudio to add sounds that mimic the way her father would break sentences into small, more manageable parts.

Every year, I’m impressed with the projects students come up with for the Swift Student Challenge, and this year is no exception. Harshitha Rajesh and Roscoe Rubin-Rottenberg, whom Federico and I spoke to Monday, as well as the Distinguished Swift Student Challenge winners whose projects Apple featured today, are great examples of the sort of impactful projects that students from 35 countries and regions have created for the Challenge. It’s great to hear that 50 of the students will be at WWDC this year. Hopefully, Federico and I will have the chance to meet a few of them.

Magic Rays of Light: A Return to Acapulco, Let Loose Predictions, and Constellation→

This week on Magic Rays of Light, Sigmund and Devon make their long-awaited return to Las Colinas with Acapulco season three, share their predictions for Apple’s upcoming Let Loose event, and recap Constellation.

Show Notes

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Devon Dundee | Follow Devon on Mastodon or Threads

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Emulate All the Things→

Jason Snell, writing at Six Colors about the arrival of emulators on the App Store:

So where do we go from here? While Apple’s acceptance of emulators in the App Store is groundbreaking, and should delight many fans of retro gaming consoles, it’s an extremely limited change. Nobody really knows how Apple defines any of the words in that phrase. How old is retro? Is an old computer on which you can play games a console?

I grew up playing games on early computers, including the Apple IIe. Does the ability to open a spreadsheet in AppleWorks disqualify an Apple II emulator that would otherwise let me play Lode Runner and Choplifter? And if so, why?

I continue to be perplexed by Apple’s (intentionally?) vague designation of “retro” consoles for emulators. Perhaps the company is waiting for the market to figure itself out without having to intervene by selectively banning certain types of emulators? Perhaps rejecting requests to use JIT recompilers is Apple’s way of implicitly drawing the “retro” line?

Jason mentions another interesting point: what about emulating old computers that also happened to have games on them, or emulating old iOS games that are no longer compatible with modern iPhones? There are some precedents for old computers on the App Store: a Sinclair ZX80 emulator was recently updated with the ability to load external ROMs, and there appear or be some Commodore 64 emulators too (some of them with… questionable features). In the age of entire vintage OSes running inside a web browser, I think it’d only make sense for Apple to approve them on the App Store too.

As for old iOS games, while I agree with Jason, I’d be very surprised if Apple went down that path rather than cutting deals with developers to remaster old games for Apple Arcade. I’ve always cared about game and app preservation on the App Store, but I’m afraid that ship has sailed.

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Assassin’s Creed Mirage Is Coming to iPhones and iPads on June 6th

At last fall’s iPhone event, Apple and Ubisoft announced that Assassin’s Creed Mirage would be coming to the iPhone 15 Pro and Pro Max. Today, Ubisoft confirmed with a press release that the game is coming on June 6th, just before WWDC. In addition to the iPhone, the game is coming to iPad Air and iPad Pro models with an M1 chip and later, which includes the 5th generation iPad Pros released in the spring of 2021 and later, as well as the current iPad Air.

According to Ubisoft’s website:

Developed by Ubisoft Sofia, these ports offer an intuitive, comfortable and engaging gaming experience with optimized touch controls and controller support. Cross-save and cross-ownership will also be available for players to enjoy the game between iPhone and iPad as they please.

The game will also be a Universal Purchase that will work across the iPhone and iPad and will be free to download and play for 90 minutes. The full version of Mirage will unlockable for $49.99. If you’re interested in pre-ordering Assassin’s Creed Mirage, you can do so now on the App Store.

Assassin’s Creed Mirage launched on consoles and PCs last fall to favorable reviews. I’m looking forward to giving it a try on the iPhone and iPad, but I’m a little disappointed that it’s not also launching on the Mac.

Sofa 4.0: A Customizable Downtime Tracker Without Compromises

I’ve written about media-tracking apps a lot in the past, and they tend to fall into one of two categories: there are ‘generalist apps’ that cover multiple types of media, and there are ‘specialist apps’ that go much deeper into one particular kind. The benefit of the former is having a one-stop destination for all your media tracking, while the latter usually goes further, focusing on the unique characteristics of one media type. There are advantages to each approach, but they’re serving two different kinds of users, so it’s not that surprising that apps don’t try to do both.

That’s why I was intrigued when I heard about Sofa 4.0 and its custom Categories and Ingredients features, which launch today. Sofa has always been one of my favorite apps for tracking multiple types of media, but as soon as I saw custom Categories and Ingredients, I knew the app had the potential to transcend the media tracker category by letting users have a greater say in how it’s used. That’s exactly what its developer, Shawn Hickman, has done, and the results are fantastic.

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The Talk Show, Episode 399: ‘I Decapitated the MacBook Air’ with Federico Viticci→

This week, Federico joined John Gruber on The Talk Show for a wide-ranging conversation about:

It’s a terrific episode from two people who have witnessed the evolution of blogging firsthand and Apple’s struggle to find a comfortable place for the iPad in its product lineup. That makes it the perfect warmup for next week’s Apple event.

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