The tech group has suffered from the corona restrictions in China.
(Photo: Reuters)
san francisco For the most valuable technology group Apple, its heavy dependence on manufacturing in China has taken revenge. There were always delays in December, said Apple CEO Tim Cook on Thursday when the annual figures were presented.
Ironically, in the most important Christmas quarter for Apple, the group encountered delivery problems with its top smartphone iPhone 14 Pro and iPhone 14 Pro Max. Revenues from the smartphones fell eight percent year-on-year in the past quarter to $ 65.8 billion. In the meantime, however, the difficulties along the supply chain have been overcome. “The problem is behind us,” Cook said.
Overall, sales fell by around five percent to 117.2 billion dollars (107.4 billion euros). The group missed the expectations of the analysts, who had expected 121 billion dollars. In China, revenue shrank by seven percent to $23.9 billion.
Things went much better than expected with iPads. The group earned $9.4 billion from the sale of the tablets, 30 percent more than in the same period last year. Analysts had only expected $7.8 billion. Cook attributed this to the introduction of new models.
Net earnings were below forecast at $1.94 per share. The Mac computer business fell from $10.8 billion to $7.7 billion. This caused stocks in after-hours trading in the US to fall by around four percent. However, for the first time in the company’s history, Apple was able to report the number of two billion active devices. “That’s double what it was seven years ago,” Cook said.
Corona situation in China burdened
The large user base is the basis for future growth, announced CFO Luca Maestri. Apple will try to generate additional sales for customers via additional services that are subject to a fee. “We now have more than 935 million paid subscriptions across all services on our platform, up from more than 150 million in the last 12 months alone,” said Maestri.
China is not only by far the most important manufacturing market for Apple. The People’s Republic is also an important sales market. The government in the most populous country on earth had reacted with strict restrictions since the outbreak of the corona pandemic, but suddenly largely lifted them in November. A massive wave of infections followed. Since then, however, the situation seems to have calmed down.
Cooks said: “If you look at December openings, we saw a significant change in footfall in our stores compared to November.”
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Insider Intelligence analyst Yory Wurmser said, “As China resumes operations, sales should increase in Q2, but Apple is likely to further diversify its supply chain.” The iPhone company is estimated to manufacture more than 90 percent of all smartphones in the world People’s Republic. Most recently, however, the company had also strengthened its focus on India as a production location.
Apple repurchased $19 billion worth of stock
India is an important country for Apple, Cook said, adding: “India is a very exciting market for us and an important area of focus. We introduced the online store there in 2020. Soon we will also offer Apple Retail there.” Apple is trying to repeat the success it has had with consumers in China, following the same example in India.
The group earned $9.4 billion with the sale of iPads, 30 percent more than in the same period last year.
(Photo: Bloomberg)
Apple said it repurchased $19 billion of stock during the quarter and ended the period with $54 billion in net cash. Apple didn’t provide a specific guidance, but CFO Luca Maestri said sales in the current quarter would be at a similar level to the previous quarter.
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Analyst Dan Ives from wealth manager Wedbush suspected that Apple’s business over the next few quarters would depend primarily on China. Apple has survived its “supply chain disaster”.
Basically, there is no demand problem, only a supply problem. And that now seems to have been resolved. Ives said: “While caution is in the air, post-lockdown China is showing a recovery that should continue over the next few quarters.”
With agency material
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