Apple CEO Tim Cook during a visit to a company store in New York. ANDREW KELLY (Portal)
Apple has seen profits fall for the first time in almost four years. The tech giant reported Thursday that China’s tight restrictions to prevent a renewed outbreak of the coronavirus epidemic were affecting sales of its flagship product, the iPhone, during the holiday season. This has resulted in the Tim Cook-led company ending 2022 down 5% compared to the same period in 2021. Apple closed the year with $117.2 billion.
Given the negative numbers, the CEO preferred to highlight other milestones achieved by the company. That includes record sales from services, the App Store App Store, music catalog Apple Music and its digital platform Apple TV+, which has become a key asset in times of streaming wars. This space reported $20.8 billion in revenue in the most recent quarter of 2022, the most valuable since services began reporting in 2015.
“We continue to operate in a challenging environment, but we pride ourselves on having our best ever offering of products and services while continuing to focus on the long term,” CEO Cook said Thursday. Net income was $30 billion, down 13% year over year. The businessman also pointed out that the company was dealing with an unfavorable exchange rate. Despite this, the company’s stocks continued to be in the black and even recorded a plus of 3.7% after the market closed and the figures for the 2022 financial statements.
Last October, the company increased the prices of its Apple Music and Apple TV+ products. The services posted a profit of $19.2 billion in the third quarter, up 5% from the same period in 2021. However, the company remains wary of the number of streaming service subscribers. Analysts estimate this to be between 20 and 40 million users.
Nevertheless, Cook assured this Thursday that the company already has around 2,000 million active devices worldwide. The growth and its gadgets have been particularly beneficial in Asia. India, Indonesia, Thailand and Vietnam are some of the countries where the apple brand’s presence has increased. In America, the CEO also mentioned the case of Brazil.
Luca Maestri, the finance director, highlighted the data despite the “challenging macroeconomic environment” and supply chain constraints. Apple was the only major tech company not to make headlines for mass layoffs. Four of the five have laid off tens of thousands of professionals in recent months, while Cook’s company has been more cautious about staff growth and has made some cost-cutting measures (Cook, for example, took a 40% pay cut this year). . It remains to be seen whether the company will join the trend in the coming weeks after the negative quarter.
In Cupertino, the situation in December is considered a pothole that they left behind. Apple has adjusted supply chains and Beijing’s relaxation of measures to combat the virus has also eased work at the company’s Zhengzhou plant, which was the scene of a protest last November over improved working conditions. Analysts anticipate that the company will return to the growth path for the quarter ending in March, in which it will be able to meet the demand for the smartphone. Others point out that the company is preparing new products, including its first foldable iPad, which could increase consumer interest.
In October, Tim Cook’s company reported closing out fiscal 2022 with annual profits of $99.8 billion, up more than 5% year over year. It was the highest figure ever achieved by a private company. In this case, it was achieved through the surge in purchases of smartphones and laptops, work tools in the telecommuting era ushered in by the pandemic. At that time, the company also celebrated sales growth of 7.8%. In the most recent quarter, however, Apple was caught in a global economic slowdown.
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