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Foreign currency pressures, pandemic-hit supply chains and the Russia-Ukraine conflict have impacted Apple’s growth in the first quarter or 2023, results for which were announced on Friday. Despite the lower than expected numbers, Apple CEO Tim Cook asserted that the company had crossed over two billion active devices and recorded its best ever revenue from services.
Here are the key takeaways from Apple’s first quarter results:
Apple results showed the company recorded a revenue of $117 billion, a 5 per cent decline from the previous year. This reportedly is a deeper downturn than predicted by analysts. The dip in sales have been largely attributed to the pandemic-driven restrictions imposed on Apple’s manufacturing units in China which in a way limited the supply of its new iPhone during the holiday season.
The decline is significant since the December quarter with its holiday season is seen as Apple’s biggest sales driver of the year. This is Apple’s first quarterly decline in four years. The first time it missed holiday sales projections was in 2015.
One of the highlights of the latest report was the uninterrupted dominance of Apple products as the most popular devices in the world. Cook revealed that in the December quarter, Apple added another feather to its cap after it registered over 2 billion active devices around the world.
Apple also took the biggest profit share from global smartphone sales in 2022. The tech behemoth gained 85 per cent of operating profit and 48 per cent of revenue from smartphone sales in 2022, according to a report in Bloomberg.
On the other hand, in India Apple sold as many as two million iPhones in the fourth quarter of 2022. The brand which is wildly popular recorded an increment of 18 per cent on a quarter-on-quarter basis. A report by CyberMedia Research stated that the iPhone 14 series, launched in 2022, recorded a 59 per cent market share, and iPhone 13 series gained 32 per cent share in the fourth quarter of 2022 in India.
This year some of the biggest tech companies such as Microsoft, Google, Amazon and Meta engaged in mass layoffs. Apple, however, seems to have steered past the wave of layoffs that was an outcome of the sluggish global economy.
On layoffs, Cook said Apple has been managing costs very tightly and that it has been curtailing hiring in certain areas. However, it continues to hire in other areas. “I view layoffs as a last resort kind of thing,” he said. “You can never say never. We want to manage costs in other ways to the degree that we can.” Incidentally, Cook had taken a more than 40% cut to his pay this year.
In the earnings call after the results, Cook said Apple did ‘fairly well’ through Covid in India and the company is ‘even more bullish now’ about the emerging market. He said it was for this reason that the company has been investing and diverting significant energy towards retail in India especially through its online store.
While engaging with an analyst’s question, Cook revealed that for India Apple set a quarterly revenue record and grew strong double digits year-over-year. “We feel very good about how we performed,” he said, adding that this was despite the challenges.
Cook revealed that India is an exciting market for Apple and is presently its major focus. The company introduced its online store in India in 2020, and the CEO revealed that the company will also bring Apple Retail to India. “We are putting a lot of emphasis on the market. There’s been a lot going from financing options and trade-ins to make products more affordable and give people more options to buy,” Cook said.
Cook’s latest comments in the wake of the recent reports suggesting that Apple is gearing up to shift some of iPhone production outside China, to countries such as India and Vietnam. This has been seen as Apple’s way of diversifying its iPhone manufacturing and India has been on the cards to be a major beneficiary of this move. Apple is also readying for a retail push and is opening stores in Mumbai and Delhi soon.
