Apple Inc reported its worst holiday performance in four years after supply snags and a softening economy hurt iPhone sales, exposing cracks in what has been one of tech’s most resilient companies.
Revenue fell 5.5 percent to US$117.2 billion in the December quarter, Apple’s biggest sales period of the year, coming in well short of analysts’ average estimate of US$121.1 billion.
It was Apple’s first quarterly decline since 2019, and the first time the company has missed analysts’ holiday sales projections since 2015.
Photo: AFP
The shares slid as much as 5.6 percent in late trading following the report, though they did pare some of the losses after Apple CEO Tim Cook discussed a rebound in China, which is emerging from strict COVID-19 rules.
He also said Apple’s production problems have subsided.
The iPhone and Mac were particular weak spots for Apple last quarter, dragged down by a broader slump afflicting mobile devices and computers. The COVID-19 restrictions in China added to Apple’s woes, making it harder to ship enough of the most popular versions of the iPhone.
Timing was another issue: The company did not launch new Macs and HomePods until recent weeks, missing the end of the holiday quarter.
“The world continues to face unprecedented circumstances — from inflation to war in Eastern Europe to the enduring impacts of the pandemic — and we know that Apple is not immune to it,” Cook said on a conference call. “But whatever conditions we face, our approach is always the same. We are thoughtful and deliberate.”
Earnings came in at US$1.88 per share during the fiscal first quarter, which ended on Dec. 31. That compared with an average estimate of US$1.94 per share.
The Cupertino, California-based technology giant did not provide a detailed outlook for the second quarter, continuing an approach it adopted at the start of the pandemic in 2020, but it did lay out some expectations.
Apple said that its performance in the March quarter would mirror that of the first quarter. That means a revenue decline of about 5 percent — compared with US$97.3 billion a year earlier — could be in the cards. On the positive side, the company said iPhone revenue would accelerate in the March quarter and that services revenue would grow. However, the iPad and Mac would likely decline.
Apple generated US$65.8 billion from the iPhone in the period, missing the estimate of US$68.3 billion. That also represented a decline from the US$71.6 billion that the product brought in a year earlier.
While the latest iPhone was a more significant leap than the previous version, the factories producing the popular Pro models in China were shuttered for weeks during the quarter due to COVID-19 pandemic restrictions.?
The company made US$7.74 billion from the Mac, far short of the US$9.7 billion estimate. That was also a significant drop from US$10.9 billion a year ago.
It was a tough year-on-year comparison given that Apple launched a revamped MacBook Pro line in the previous holiday period. This time around, it did not update the MacBook Pro and Mac mini models until this quarter.
Cook said that Apple would continue to refine its supply chain.
“The last three years have been a pretty difficult time, between COVID and silicon shortages and the like,” he said. “I think we have had a very resilient supply chain.”
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by