Apple has released a report for the first quarter of the fiscal year 2023, which ended on December 31 for the company. Revenue fell 5%, Apple’s first drop in sales since Q2 2019. The main reasons are said to be a decline in iPhone sales due to quarantine measures in China, a strong dollar and general macroeconomic factors. The company’s shares fell 4%.
In the past quarter, Apple’s revenue was $117.2 billion, down 5.49% from the same period last year. It’s also well below analysts’ expectations of $121.1 billion in revenue. Earnings per share were $1.88, down 10.9% year-on-year.
During the first quarter of fiscal year 2023, Apple faced a wave of problems. Chief among them were problems with the release of the iPhone 14 Pro and Pro Max, caused by lockdowns due to COVID-19 and related unrest at the largest iPhone assembly plant located in Zhengzhou, China. In an interview with Reuters, Apple CEO Tim Cook said the disruption to production “continued for most of December” but “now production is back where we want it to be.” Cook said that the lockdowns in China created a double whammy, limiting not only supply, but also demand – sales in China fell by 7% to $23.9 billion. wearable devices such as the Apple Watch.
Apple said in a report that iPhone sales generated $65.8 billion in revenue last quarter, down 8% from a year earlier and below analysts’ estimates of $68.3 billion. Sales of wearables and other Apple devices last quarter fell 8.3% year-on-year to $13.48 billion, also below market expectations of $15.23 billion.
However, sales of Mac computers sank the most – this part of the business brought in only $7.74 billion, which is 28.66% less than last year, and also significantly less than analysts’ forecasts of $9.6 billion. there has been a surge in sales associated with the ongoing pandemic and mass remote work, as well as the release of new MacBook Pros with proprietary Apple processors.
The only hardware segment that showed growth in the last quarter was the iPad – their sales grew immediately by 29.66% to $ 9.4 billion and significantly exceeded analysts’ forecasts of $ 7.76 billion. This is due to the release of new models and the absence of a shortage, which hindered sales of Apple tablets a year earlier.
Apple Services, which includes Apple Music and Apple TV+ audio and video streaming services, the App Store, Apple Pay, iCloud and other services, grew 6% year-on-year to $20.8 billion, slightly better than expected. analysts at $20.7 billion. It was noted that cloud services, payments, including Apple Pay and Apple Card, and music are strong areas of Apple services. Cook added that Apple employees are now beta-testing a “buy now, pay later” installment plan that will become one of its services.
CFO Luca Maestri added that Apple expects Mac and iPad revenue to fall by double digits in the current quarter, while revenue decline in smartphones will slow down compared to last quarter.
Apple investors are waiting to see if the company will explore new market segments this year. There are high hopes for Apple’s plans to release a flagship mixed reality headset this year that could cost around $3,000. In addition, there are rumors that the company is working on a more affordable AR / VR device.
Finally, it was noted that the company has slowed down hiring and is cutting costs. Unlike many tech companies, Apple hasn’t announced massive layoffs. “We also understand that the environment we are in is challenging. And so we cut costs. We’re cutting down on recruitment, we’re very careful and considerate about the people we hire,” Cook said.
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