Sometimes it’s all about expectations. Apple’s fiscal second quarter 2023 results looked a bit like a bad-mouth movie, but then you see it’s not. What bad. In fact, maybe it was… okay? Like, like, something like?

Or, to put it another way, when the economy looks shaky, it’s awfully nice when one of the most valuable companies in the world is making $94.8 billion in revenue and $24.2 billion in profit, even if it’s in decline. A little from the same quarter a year ago. After a lot of warning three months ago, Apple’s business still seems pretty solid. If this is what a weak quarter looks like, Apple is as blue chip as a blue chip can be.

As always, among the numbers and Apple’s traditional phone call with financial analysts, there are a few nuggets of what Apple does and what Apple CEO Tim Cook and CFO Luca Maestri think. I’m only here to chew gum and get nuggets, and I’m out of gum.

sigh of relief

It was a sigh of relief. Apple’s total revenue was down just three percent year-over-year, making the second quarter the second-lowest in Apple’s history. iPhone, Apple’s main source of income, rose slightly and set all-time records in Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey and the United Arab Emirates. Apple’s second-biggest budget item, Services, also rose slightly to set a new record.

Dominik Tomaszewski / Foundry

The rest of the business was mixed. While Apple is always looking to offer superlatives for the Mac, iPad, and wearable product segments, there were few of them this quarter. It has become clear that the Mac and iPad have been victims of their recent success, at least when it comes to sales trends: both products sold well in the early days of the pandemic, and the Mac also saw a huge sales boost thanks to the arrival of apple silicon. But those days are behind us, and both products should endure the “tough comparison” of last year’s second quarter, when Apple’s first silicon MacBook Pros and iPad M1s generated sales that this year’s models simply couldn’t match.

I wouldn’t worry too much about this, iPad and Mac fans. Both products are selling at levels not seen in the last couple of years, and there has been significant growth in the installed base of both. Apple also said that more than half of iPad sales last quarter came from first-time iPad buyers, indicating the platform’s growth potential.

Looking to emerging markets, especially India

After Tim Cook’s trip to India last month, there was a lot of talk on the phone with an analyst about India. And the news was good: Apple set a quarterly record and posted strong double-digit growth. Cook called it a “mainstream” with “incredible” flamboyance. Most importantly, Cook mentioned the rapid growth of a key customer base for Apple products: “A lot of people coming into the middle class” in India, he said, “and I really feel like India is at a tipping point and it’s great to be there.”

If this sounds familiar, it’s because Cook said a lot of the same about China ten years ago. But when asked to compare India’s potential with that of China in the past, Cook countered – a politically wise decision. “I think every country is unique and has its own path,” he said. Every country is like a snowflake, but snowflakes with huge populations and a rapidly growing middle class are Apple favorites.

However, apart from India, Apple has shown some love for other emerging markets where it is doing well. “It was a great quarter for emerging markets in general, despite [currency] headwind,” Cook said. “We are making efforts in a number of these markets and really see, especially given our small share and demographic dynamics, there are big opportunities for us in these markets.” In other words, in many of these markets, Apple’s overall market share and presence is so small that there is virtually no room for growth. And Wall Street analysts certainly love to hear about upside potential.

A little about AI

Veteran analyst Shannon Cross of Credit Suisse asked Cook if he had anything to say on the tech industry’s hot topic, artificial intelligence. And Cook had an interesting, albeit roundabout, answer.

“I really think it’s very important to be thoughtful and thoughtful in how you approach these things,” Cook said. “And there are a number of issues that need to be addressed, what is being said in different places. But the potential is certainly very interesting. And we’ve obviously made tremendous progress in integrating AI and machine learning across our entire ecosystem, and we’ve been weaving it into products and features over the years, as you probably know. You can see this in things like fall and crash detection and ECG. These things are not only great features, but also save people’s lives. And so it’s absolutely wonderful. And so we see AI as more than that, and we will continue to weave it into our products in a very thoughtful way.”

While Apple is often portrayed as “AI behind” because it doesn’t have its own Siri chatbot in beta, the truth is that the company is using machine learning technologies in every corner of its platform, from sensory analytics on the Apple Watch to face and object recognition in the Photos app. As for other things – I’m looking at you Siri – it’s hard to tell if Apple has lost the plan or is just keeping everything under wraps until it releases the new AI-driven Siri 2.0 to all of us. But “weaving it into our products” is a good way to describe what Apple has been doing with AI so far.

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Horror at the Parade

So what have we learned? Mostly things are weird and we’ve all been through a lot lately, but Apple will be fine. On Thursday, Tim Cook came up with a new phrase to describe our strange era: “horror parade,” which actually sounds like a pretty funny Willy Wonka thing.

But it can’t compare to the “crosswind cocktail” that Apple faced nine months ago. And when Cook introduced this phrase, he did it to emphasize that Apple is doing well: “Despite this parade of horrors … we are happy with where we are and what our plans are.”

Sometimes you are terrible; sometimes you’re the guy with the broom at the end of the parade, sweeping up after a terrible one. And all the while, it feels like Apple is watching the parade from its shaded luxury box.