new York Apple’s business is resilient to economic concerns and logistics bottlenecks. Last year, the Cupertino-based group was able to increase sales of the iPhone in an overall shrinking smartphone market. This, combined with higher revenue from the service business, more than offsets the decline in sales of other devices.
Overall, Apple’s sales in the third quarter rose by two percent to around $83 billion. Profits fell by more than ten percent to $ 19.4 billion, as Apple announced after the US market closed on Thursday.
“This quarter’s record results speak to Apple’s continued commitment to innovate and enrich the lives of our customers,” said Apple CEO Tim Cook. He particularly emphasized “new functions to protect the privacy and security of users through to tools that improve accessibility”. Business was managed effectively despite the difficult market environment, added CFO Luca Maestri. The number of active devices is at an all-time high.
The results were positively received on the stock exchange. Analysts had expected worse numbers. The stock gained around 3 percent in after-hours trading.
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Among analysts, the reaction was less clear. Sophie Lund-Yates, equity analyst at finance house Hargreaves Lansdown, praised the “remarkable resilience of the group”. However, she saw the decline in product sales across all categories as a warning sign, “as hardware is still the engine of the business.” It is encouraging to see that Apple is making more and more money with services. “But the service network can’t woo customers if iPhones, Macs and smartwatches aren’t sold.”
It is therefore crucial how the new iPhone models would arrive later in the year. “With the US in a tech recession and consumer confidence at rock bottom, expectations may be overblown,” Lund-Yates said. Success in the coming months is not guaranteed, particularly given the tech giant’s exposure to China China is not only a production location, but also an important sales market, and the economic prospects in Asia are also deteriorating.
Apple’s foray into the lending business when buying new devices raises questions. This is a thorn in the side of US regulators. One could argue, the analyst says, “that this is not the right time to encourage people to get into debt.”
Growing dependency on the iPhone
The new figures show the importance of iPhone sales for Apple. This was again the driver of development. Sales of the smartphone grew from $39.6 billion in the same period last year to almost $40.7 billion. According to calculations by the analysis company Canalys, Apple was able to expand its share of the smartphone market, which was shrinking by nine percent, in the past quarter thanks to good sales of the iPhone 13.
In the service business, which includes, for example, subscription income from Apple’s music and video streaming offerings and fees from software providers in Apple’s App Store, there was even more significant growth from $17.5 to $19.6 billion. On the other hand, Apple posted declines in Mac computers and iPad tablets. The dependency of the group on its flagship smartphone is increasing.
Breathe a sigh of relief on the tech market
Wedbush analyst Dan Ives saw a sigh of relief in the tech market. “Apple just delivered a robust June quarter that will be at the center of the tech universe.” Cupertino’s ability to manage supply chain constraints despite the Covid shutdowns in China is impressive.
Consumer demand is also solid, even in China. Good sales can be expected for the upcoming iPhone 14. He assumes “that Apple can weather this economic storm with an intact demand and growth story for iPhones and services on the front lines.”
In the past few days, Wall Street has been concerned that tech stocks will continue to plummet. Just last week, Snap and Twitter presented alarming numbers. On Tuesday evening, solid results at Microsoft and Google’s advertising business, which was growing contrary to the trend, provided cautious relief on the tech market.
With agency material from the dpa.
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