Apple Inc.’s holiday performance was the worst it had seen in four years due to supply issues and a weakening economy that affected iPhone sales, demonstrating some frailties in what has previously been a very dependable tech company.
Revenue experienced a 5.5% dip to $117.2 billion in the December quarter, which is Apple’s largest sales period of the year, and was not up to par with the average Wall Street prediction of $121.1 billion. This is Apple’s first quarterly drop since 2019 and the first time the company has not achieved its holiday sales goals since 2015.
Shares dropped to as low as 5.6% in the evening after the report came out, but Tim Cook’s words about a resurgence in China and smoothed-over production issues brought some of the losses back.
Sluggish Demand for Computers and Mobiles
Apple experienced some difficulty last quarter, particularly with their iPhone and Mac products, due to the general decline in mobile device and computer demand. On top of that, the Covid-related restrictions in China made it difficult for Apple to ship enough of the most popular iPhone models. The timing was another factor, as the company launched its new Macs and HomePods too late to make it in time for the holiday quarter.
For the fiscal first quarter, which ended Dec. 31, earnings per share were reported at $1.88, which did not meet the average expectation of $1.94 per share.
Apple, based in Cupertino, California, did not give an in-depth forecast for the upcoming quarter, which begins in March. Continuing their approach since the start of the pandemic in 2020, they did provide some predictions. It is expected to follow the same pattern as the first quarter, meaning a 5% decrease in revenue compared to the year prior ($97.3 billion). On the bright side, iPhones are anticipated to see growth, as are services revenue. Unfortunately, the iPad and Mac may experience a drop.
Apple’s shares have been doing well this year, closing up 3.7% at $150.82 in New York and gaining 16%. Although the company didn’t bring in as much money from iPhones as expected, with $65.8 billion compared to the $68.3 billion estimate, it still represents a decrease from the $71.6 billion they made the previous year.
Holiday Season,a Let-Down for Apple Products
The Wearables, Accessories, and Home division, which includes the Apple Watch, Air Pods, Apple TV, HomePod speakers, and Beats products, saw $13.5 billion in sales. This was slightly lower than the estimated $15.3 billion. Additionally, these numbers are down from last year’s $14.7 billion. On the contrary, the iPad division saw $9.4 billion in sales, which was higher than the estimated $7.8 billion. This increase can be attributed to the October launch of new iPad Pro updates and the revamp of the entry-level model compared to the weaker quarter a year ago.
The Services category saw huge success, bringing in a record of $20.8 billion, surpassing all expectations of $20.5 billion and rising from the year before at $19.5 billion. This growth was aided by the recent price increases for Apple Music and Apple TV+, by $1 and $2 respectively, in addition to other offerings like App Store, AppleCare customer service, repairs, Arcade, and News+.
