Apple’s pandemic iPhone and Mac sales boom hit a snag

Tech companies were already huge before the COVID-19 pandemic began to upend lives around the world three years ago. And they have continued to grow as we have become more dependent on our smartphones, computers, and video conference calls.

Apple is now the latest tech giant to signal that this period of growth may be coming to an end.

The company said sales of its most important product, the iPhone, fell more than 8% to nearly $65.8 billion. The reason, according to Apple, included several factors, such as the fluctuating price of the US dollar across the world and particularly strong sales of its products over the previous year. But the real problem came from the COVID-19 shutdowns late last year across the Chinese manufacturing centers that Apple relies on. The results led to protests in Chinaand supply shortages for Apple’s iPhones, especially its $999 iPhone 14 Pro series.

Apple CEO Tim Cook said many of these manufacturing issues have been resolved for now.

In total, Apple said it made nearly $30 billion in profit, down 13% from the same period last year. That translates to earnings of $1.88 per share, on overall revenue of nearly $117.2 billion, which itself was down more than 5% from $123.9 billion. dollars brought in last year. It also fell short of average analyst estimates, which were $1.94 per share in earnings on $121.1 billion in revenue, according to surveys released by Yahoo Finance.

“I’m proud of how we’ve handled seen and unforeseen circumstances over the past few years,” Cook said on a conference call after the company’s financial report on Thursday. “I remain incredibly confident in our team and our mission and in the work we do every day.”

Investors appeared to take the report in stride, sending Apple shares up 4% to $156.75 per share early Friday. Last year, investors increased the company’s shares above $3 trillion for a short timeand although the value of Apple has fallen to around $2.5 trillion, it is still the most valued company in the world.

Part of a larger trend

Apple’s financial disclosures, covering the three months of its fiscal first quarter ending in December, are the latest in a constellation of reports that increasingly paint a picture of how the tech world is faring. through this period of economic uncertainty. The biggest tech giants have sounded the alarm of tough times after years of seemingly unstoppable growth during the pandemic. Apple in particular posted record revenue and profits at this time last year, after its iPhone 13 was a hit of the 2021 holiday shopping season.

But a mix of ongoing parts shortages, COVID lockdowns in Chinese manufacturing hubs, and people cutting spending for fear of a recession has put many tech companies in a loop. Amazon, the parent of Facebook Meta and the parent of Google Alphabet all have suffered dramatic layoffs, citing declining ad revenue. Other companies, such as Microsoft, have also made layoffs.

Apple, for its part, has frozen hiring in certain areas, and Cook has volunteered to reduce potential future compensation.

One reason for this approach could be that Apple’s iPhone division wasn’t the only product segment facing challenges. Its Mac IT team, including its MacBook Laptops
, reported that sales fell nearly 29% to $7.7 billion. The company’s apparel and accessories business also saw sales that fell more than 8% to around $13.5 billion, although Apple introduced a new extreme sports-focused $799. Apple Watch Ultra and revamped second generation AirPods Pro headphones.

Still, Cook tried to maintain a positive tone, saying the company was “focused on the long term.” He also noted that the company has more than 2 billion active devices across all of its product categories, a new “all-time high”.

“We are excited about the year ahead,” he told analysts. “At Apple, we are always looking forward, always focused on the next challenge.”