Cupertino Apple has posted strong revenue and profit growth despite the global chip crisis and supply chain issues. The iPhone maker increased sales year-on-year by nine percent to $97.2 billion (€92.5 billion). A net profit of 25 billion dollars remained in the group coffers. That was almost six percent more than a year earlier.
But Apple CEO Tim Cook warned that his company could also feel global problems, especially restrictions due to the corona pandemic and bottlenecks in global chip production. “We’re not immune,” Cook said. Apple’s shares initially rose in after-hours trading, but then turned around four percent into the red in the meantime.
CFO Luca Maestri specified, “We expect these restrictions to be in the range of $4 billion to $8 billion, which is well above what we experienced in the March quarter.” Neither Cook nor Maestri want to go on a forecast for the current year and said the global situation was too unpredictable.
For Apple, it is only possible to protect itself against global upheavals to a limited extent, said Cook. “In this business, you never want to stockpile too much inventory,” Cook said. In the case of chip deliveries, for example, it is hardly possible to provide sufficient buffers for the supply chains.
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Tim Cook acknowledged that there are long waiting times for new products such as the Mac computer to be delivered. This is due to the restrictions due to the corona pandemic and the lack of chips, said Cook.
It is sometimes a challenge to get iPhones and other products to customers. “Today, freight transport is a major challenge. Both because of inflation and because of availability. We’re currently transporting our products to our customers in every way we can,” Cook said.
Cook hints that Apple could shift production to better accommodate changes along the supply chain. “We are constantly taking steps to improve. I don’t want to go into those details because they’re sensitive,” Cook said.
Strong growth in the service area
Despite the challenges, Apple was able to show strong growth in almost all areas. The growth in the service area was particularly strong, in which the business with storage services, the app platform, but also music and video streaming is bundled. The division’s sales grew by a good 17 percent to $19.8 billion.
With the most important Apple product, the iPhone, sales increased by 5.4 percent to almost 50.6 billion dollars. The group was also pleased with the Mac computers with a sales increase of 14.6 percent to a good 10.4 billion dollars. In contrast, the global PC market shrank by around five percent in the quarter, according to calculations by the analysis company IDC. The electronics industry as a whole is struggling with chip bottlenecks and other problems in the supply chain.
Analyst Kyle McNealy from the investment bank Jefferies rated Apple’s figures as a “good result”. He emphasized that Apple was particularly successful in China, growing by three percent to $25.8 billion. Despite strong domestic competition from brands such as Vivo, Oppo and Xiaomi, Apple is in a very strong position.
McNealy also referred to Apple’s further increased gross margin of 43.7 percent. Although Apple offered discounts in markets like the US and UK, there were hardly any discounts, especially in China. “It makes sense that prices would remain high at a time of supply chain bottlenecks,” McNealy wrote.
Apple wants to use its profits to buy back a record amount of shares. Apple announced that the company’s board of directors has approved $90 billion in share buybacks. No other company in the world has launched such a large program. Two days earlier, Google announced a $70 billion share buyback program. According to calculations by S&P Global Market Intelligence, Apple bought back shares worth 88.3 billion US dollars last year.
With material from agencies
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