Apple sales fall 5%, worst quarterly result since 2016
Apple unveiled this Thursday, February 2, the results of its first fiscal quarter 2023, ended December 31, 2022. With 117.2 billion dollars in turnover, the Californian firm admits a drop of 5% year-on-year.
Difficulties on the production line
According to the accounts of CNBC, this is the biggest fall in turnover in a comparable quarter since September 2016. Tim Cook, the CEO of the firm, has tried to justify the losses of recent months. According to him, the decline in income is attributable to three factors: a strong dollar, production problems in China and the overall macroeconomic environment.
The drop in performance could be explained in particular by the cacophony, at the end of 2022, reigning in the Foxconn factory in Zhengzhou (China). Due to the Middle Kingdom’s strict health policy and a wage-related strike, iPhone production there was severely impacted for several weeks before the holiday season. Supply of iPhone 14 Pro and 14 Max has been drastically reduced, penalizing Apple in its sales. “So we had a big hole there”, confirmed Tim Cook. The production line would now be fully operational.
Instability of the global economy
More generally, the difficult macroeconomic environment and inflation would also affect the Cupertino giant’s sales. Consumers are turning more to basic necessities, to the detriment of big technology firms. In detail, iPhone, Mac, or Apple Watch sales would have been severely impacted.
On the good news side, Apple is pleased to have passed a new milestone in the use of its devices. “During the December quarter, we achieved a major milestone and are thrilled to report that we now have over 2 billion active devices in a growing installed base”, rejoiced Tim Cook. A large customer base on which Apple intends to rely to diversify its income through subscriptions or new products.
Today, Apple’s services seem to be a profitable and sustainable source of revenue for the firm. Business around cloud, payment and music would drive earnings growth.
For the time being, no layoffs have been announced, but Apple admits that it wants to reduce its expenses. “We recognize that the environment in which we operate is difficult. So we reduce costs [et] the hires. We are very careful […] with the people we hire”assures the leader of the apple.