Apple (NASDAQ:AAPL) is gearing up to announce its first-quarter fiscal 2024 results on February 1.

For the December quarter of fiscal 2024, the tech giant anticipates revenues to mirror the figures reported in the same period the previous year. In the first quarter of fiscal 2023, net sales experienced a 5.5% year-over-year decline, reaching $117.15 billion.

The Consensus Estimate for fiscal first-quarter revenues currently stands at $117.62 billion, signaling a modest 0.40% year-over-year growth.

Earnings expectations for the quarter are pegged at $2.09 per share, showing an 11.17% increase from the corresponding figure in the previous year. This estimate has increased by a penny over the past 30 days.

Apple has demonstrated consistent earnings performance, beating the Consensus Estimate in three of the last four quarters, with an average surprise of 3.47%.

Let’s delve into what could shape the upcoming announcement.

Positive Impact on iPhone Revenues from New Models

The iPhone remains a significant revenue driver for Apple, contributing nearly half (48.9%) of net sales in the last reported quarter. Despite a 0.7% year-over-year decline to $43.805 billion, Apple expects absolute year-over-year revenue growth for the iPhone. Our model estimates project fiscal first-quarter iPhone net sales at $66.68 billion, reflecting a 1.4% increase.

According to the latest Canalys report on worldwide smartphone shipments, Apple’s market share reached 24% in the fourth quarter of calendar 2023, surpassing Samsung’s 17%, driven by the introduction of new iPhone models such as iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max.

However, iPhone sales may have been impacted by weakened demand in the Chinese market due to increased competition from Huawei and government restrictions.

Anticipated Acceleration in Services Growth

In the fiscal first quarter, Apple expects the strong double-digit rate of growth in average revenues per week, similar to the September quarter.

In the fiscal fourth quarter, Services revenues grew by 16.3% to $22.31 billion, constituting 24.9% of total sales. The Services business has benefited from a growing base of paid subscribers, driven by the popularity of the App Store and an expanding device installed base.

With over 1 billion paid subscribers across its Services portfolio, Apple continues to attract top developers worldwide, offering innovative apps that drive user engagement. Services such as Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+, and Apple One bundle are expected to contribute to overall growth.

The strong content and recognition at award shows have propelled Apple TV+ in the competitive streaming market. According to a report from Deadline cited by 9TO5 Mac, Apple TV+ experienced a 42% year-over-year increase in total viewership, with consumption doubling in 2023.

However, despite increased viewership, Apple TV+ has not yet claimed a significant market share. According to a JustWatch report cited by 9TO5Mac, Amazon Prime Video leads with a 22% market share in the United States, followed by Netflix (21%). Apple TV+ increased its market share from 6% to 7%.

Our estimate for fiscal first-quarter Services net sales is $22.65 billion, reflecting a 9.1% year-over-year growth.

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