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Hey Scoopers,

Happy Thursday!!

Today, we look at how Apple is looking to grow its other business segments and diversify its revenue streams while reducing dependency on the iPhone.

We also look at Barbie’s monstrous box office numbers and its impact on Mattel, a publicly traded entity.

So, let’s go 🚀

Apple’s iPhone Will Take a Back Seat in 2024

The iPhone will likely take a back seat to Apple’s wearables business next year, with products like the Vision Pro, Apple Watch, and AirPods getting more attention.

The iPhone has been the primary driver of Apple’s revenue growth in the last decade. In fact, iPhone sales have surged from $1.8 billion in fiscal 2008 to $200.5 billion in fiscal 2023 (ending in September).

Since its launch in 2007, the iPhone has been at the epicenter of Apple’s product strategy. The iPhone accounted for 52% of Apple sales in 2023, up from 33% in 2009.

Yes, the iPhone will get yet another upgrade in 2024, but there won’t be any major changes. According to reports, Apple will retain the iPhone 15’s design and increase the screen size for the Pro version.

The stage is set for products such as the Vision Pro, AirPods, and the Apple Watch to steal the limelight from the iPhone.

Apple’s sales have been under pressure

Apple's sales have stagnated in the last 12 months due to slower consumer spending. Each of the company’s major product segments, which include the iPhone, Mac, iPad, and wearables, suffered declines in fiscal 2023.

The bright spot was Apple’s Services business, also a key driver of profit margins. This high-margin segment raked in a monstrous $85 billion for Apple in fiscal 2023, accounting for 22% of total sales.

The Services business includes verticals such as Apple Music, the App Store, Apple Care, Apple Arcade, Apple TV+, and more.

Its portfolio of subscription services allows the tech behemoth to generate recurring sales across market cycles, and it ended fiscal 2023 with 1 billion paid subscriptions, up 100% in the last three years.

Apple’s Services business benefits from a flywheel effect. For example, as Apple increases its content and features on the Services platform, it results in:

👉 Higher engagement

👉 Higher consumer spending

👉 Higher subscriptions

Can Wearables Drive Sales for Apple In Fiscal 2024?

Wall Street analysts are betting big on a resurgence for Apple products in the next 12 months. Further, Apple will have new technologies to promote.

According to estimates, sales of Vision Pro headsets might rise to 1 million in 2024 and 10 million in 2025, bringing in $40 billion in cumulative sales in the next two years.

Apple’s wearables business generated revenue of $41.1 billion in 2022. While AirPods is a $10 billion business, the Apple Watch contributes between $14 billion and $18 billion a year.

Apple is among the most recognizable brands in the world. Viewed as a fortress on Wall Street, it trades at all-time highs, and the stock is valued at a market cap of $3.03 trillion.

Barbie Is the Highest-Grossing Film of 2023

Barbie is the highest-grossing film in 2023, raking in more than $1.44 billion in gross sales this year.

With over $600 million in domestic sales, Barbie’s success has come at a time when audiences have moved away from superhero flicks and franchise installments in favor of fresh content.

Barbie secured the biggest opening for a film directed by a woman and is the highest-grossing film directed solely by a female director. The movie maintained the top spot at the box office for four consecutive weekends.

Its success allowed Mattel, Barbie’s parent company, to end Q3 with sales of $1.94 billion. Analysts expect Mattel sales to increase by 18.4% to $1.66 billion in Q4, while earnings might almost double this holiday season.

On the other hand, WarnerBros Discovery, the production company behind Barbie, is on track to increase sales by 22.8% to $41.5 billion this year.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.