Technology tends to be one of the best gifts during the holiday shopping season, and Apple is one of the most popular brands among them. The company sold $71.6 billion worth of iPhones last year, enough to be a Fortune 50 company on its own. So what happens when this demand collapses?
Apple will release its fiscal first quarter results on Thursday, covering sales for the holiday season that just ended. And it might be tough.
Phone and computer makers have seen sales tumble precipitously from their pandemic highs, and while the holidays tend to be a popular time to buy tech devices, the final holiday shopping season isn’t looming. not great. According to IDC surveys, worldwide smartphone shipments fell a record 18% from a year earlier, the steepest decline ever in the industry. PC shipments, meanwhile, fell an even more dramatic 28% from a year earlier.
Now Apple watchers are about to learn what that means for the iPhone and Mac. Analysts already on average expect earnings to fall to $1.94 per share, according to surveys published by Yahoo Finance, down more than 7% from the same period a year ago. Sales, meanwhile, are expected to fall to around $121.6 billion, down nearly 2%.
None of this is much of a surprise, as Apple and Wall Street analysts have warned of production slowdowns in China, driven by the COVID-19 lockdowns that ended at the end of Last year. That many potential iPhone 14 Pro owners especially for spend more time waiting or looking for their devices, which start at $999 (£1,099, AU$1,749). Here at GameSpot, we’ve heard so many people need help finding them that we’ve published a guide. to know how to find one amid numerous supply shortages.
Now that buying an iPhone is as easy as buying directly from Apple and having it shipped the next day, the question analysts and investors are asking is whether people who weren’t able to buy an iPhone earlier have waited, or if they have given up and gone with a competitor.
“December pain = March gain? Evercore analyst Amit Daryanani said in a note to investors Monday. Along with easy-to-find supplies, Evercore also said luxury goods sales data in China suggests that many people fears of a bigger recession this year may have been exaggerated. “January and beyond are expected to be stronger than usual given the unmet demand.”
Apple did not respond to a request for comment ahead of its results.
Apple launched new laptops and desktops after the holiday shopping season.
CBS/Lori Grunin
technical pain
If people buy enough iPhones to propel Apple into economic uncertainty, industry watchers wonder what will happen to the company’s workforce. So far, almost all tech giants implemented layoffspartly blaming a frantic hiring spree during the pandemic.
Apple, for its part, has frozen hiring in certain areas, and Apple CEO Tim Cook has volunteered to reduce potential future compensation.
So far, analysts don’t seem to be concerned that Apple is in a similar position to Amazon, which cut 18,000 jobs, Microsoft, which laid off 10,000, or Meta and Google, which laid off an additional 23,000 people. A total of around 235,596 people have lost their tech jobs in the past year, according to Layoffs.fyian industry monitoring tool.
“We see enormous value in the Apple ecosystem and its ability to monetize its user base,” Oppenheimer analysts wrote in a note late last year, after discussing how Supply shortages could hurt Apple’s finances in the short term. On Wall Street, that means they think Apple will find ways to make more money from people who already buy its products, such as through its Apple TV Plus Subscription Service, which costs $7 per month. “Our long-term bullish view on Apple is unchanged.”
