Apple Inc. warned that the revenue for the holiday quarter would be similar to last year. This means that investors will not see the growth they had hoped for.
Luca Maestri, Apple’s Chief Financial Officer, said that while iPhone revenue will increase in the quarter ending December, the overall sales of the company will remain the same as the previous year. He made this statement on a Thursday conference call following Apple’s quarterly report. The shares fell as much as 4,6% in late trading due to the tepid outlook.
Wall Street expected revenue growth of around 5% for the quarter. This is Apple’s most important sales period each year. Apple has said that revenue from the iPad, and Apple’s wearables, including its smartwatches, will decline significantly in the third quarter. Apple’s Mac will experience an increase in sales.
The company is trying to recover from its biggest sales slump in decades. The company just reported its fourth consecutive revenue decline, matching the streak it experienced in 2001. It struggles with a slowing computer market and shaky demands in China.
Revenue dropped to 89.5 billion dollars in the fourth fiscal quarter that ended on September 30. This compares to an average Wall Street forecast of $89.4billion. Apple did not provide any formal guidance for this quarter. It is sticking to a policy that it adopted during pandemic.
Apple’s growth in China is slowing down, according to the results. There are bans in place on US technology at some places of work, and a new smartphone from Huawei Technologies Co. provides fresh competition. The revenue from this region was $15.1 billion in the last quarter. This is down from $17 billion predicted by some analysts and a slight drop from a year ago. Cook said that the decline in revenue was due to currency fluctuations, as well a decrease in Mac and iPad purchases.
Apple shares fell as low as $169.33 during extended trading. Apple shares closed at $177.57 on New York’s exchange, a 37% increase this year.
During the fourth quarter, the company updated its flagship product, the iPhone. This period includes a little more than a week’s worth of sales data after the device was launched on September 22. The Cupertino-based company released two new watch models, the Series 9 & Ultra 2, and updated AirPods Pro with a USB-C connector.
Despite the challenges, iPhone sales were slightly higher than expected. The iPhone generated $43.8 billion, which is higher than the average estimate of $43.7. Tim Cook, CEO of Apple, said that despite concerns, the iPhone reached a record quarterly revenue in mainland China. The earnings per share for the last quarter were $1.46, exceeding the $1.39 expected.
It was reported that Apple plans to integrate the technology in several new apps and service next year. Cook added, “You’ll see product improvements over time where those technologies are at their core.”
Investors closely follow the release of new iPhone models, as they account for about half of Apple’s sales. The iPhone 15 was redesigned with titanium cases and features like a zoom camera lens. It was hoped that the new iPhone 15 would entice shoppers who were holding on to their older models longer.
Apple enjoyed a positive year-over-year comparability this cycle, as the 2022 iPhone 14 Pro models were subject to supply constraints because of shutdowns by Apple’s Chinese manufacturing partners. The iPhone 15 Pro did not have such restrictions.
Qualcomm Inc. is the world’s leading manufacturer of smartphone chips. It predicted stronger sales than analysts had expected for the current quarterly period, which sparked a rally in its stock.
Qualcomm reported a 35% rise in its smartphone chip sales from Chinese Android phone manufacturers, indicating that more customers are choosing non-iPhones.
Apple’s biggest international market is the area, which accounts for a fifth or so of its sales. Cook, however, said that he believed Apple gained market share for smartphones in China during the third quarter.
The company claimed that the iPhone had set records for revenue in several developed markets and emerging ones, including India.
Apple did not introduce any new models in the first quarter. The personal computer industry is also poised to resurgence. Apple unveiled its new MacBook Pros, iMacs, and M3 processors this week. However, the results for Apple’s December quarter will not include sales from these machines.
Apple’s Mac revenue for the fourth quarter was $7.61 billion, which missed expectations of $8.76. Apple did release new computers this year including a 15″ MacBook Air and faster desktops. Apple blamed last year’s steep decline on the manufacturing problems for the Mac. Apple lost sales in the June quarter of last year, but recovered them due to pent-up demand during the September period. This set the stage for a bad comparison this year.
The company’s revenue for the third quarter of 2009 could have been higher if it had released more iPads, as it does sometimes, or if they had made significant changes to their accessories. Apple Watches, and AirPods are only minor improvements over their predecessors.
Wearables, Home and Accessories, which includes Apple TV, AirPods, Beats headphones, and Apple TV set-top boxes, generated revenue of $9.32 Billion. This was below the estimated $9.41 billion.
Services generated sales of $22.3 billion, exceeding Wall Street’s target of $21.4 billion. This is a record-breaking result for this category. Apple is trying to increase the profitability of its Apple TV+ business. It increased prices for Apple TV+ Arcade, and News+ in October, but this change was made too recently to have an impact on these results.
iPad generated revenue of $6.44 Billion. Although it was a decline of 10% from last year, the revenue was still higher than the $6.12billion projection. Apple has not released a new iPad in this calendar year. This is the first time since 2010. Apple released a cheaper Apple Pencil for its tablets last week.