iPhone sales hurt Apple’s record sales: In a year that will be remembered as a nightmare for many IT businesses, Apple has so far weathered the storm with record third-quarter earnings.
However, iPhone sales that were lower than anticipated show that there may be holes in the ship that need to be patched.
The Silicon Valley titan reported quarterly revenues of $90.1 billion for the quarter ending September 30th, an increase of 8% from the same period last year. In addition, apple’s quarterly net profits of $20.7 billion exceeded the previous record.
While all of this may sound promising, there are some potentially alarming indicators around the iPhone, Apple’s primary source of revenue.
The company’s iPhone sales climbed by 9.7 percent to $42.6 billion during the current quarter. That is significantly less than the $43 billion that Wall Street Journal analysts anticipated. One month prior, a Bloomberg article stated Apple was abandoning previous plans to increase manufacturing of its new iPhone 14 models, ostensibly due to weakening demand.
However, Apple also posted record quarters in several other categories, including record performance for its Mac computers.
Apple refused to provide revenue predictions or projections for the entire year but stated that they anticipated the next quarter’s revenue growth to increase.
CEO Tim Cook spoke confidently about the company’s overall earnings, which broke records despite “a variety of global problems,” including the conflict in Ukraine, persistent pandemic disruptions, an unstable economy, and climate change.
In addition, silicon-related supply limitations, which have plagued many tech businesses in recent years, were “not severe,” according to Cook.
Apple’s excellent earnings came after a hectic week for technology companies
This financial storm cloud began to form when Snap recently reported its lowest year-over-year revenue increase in eleven years, primarily due to a stagnant digital advertising environment.
This week, Alphabet, a company controlled by Google, posted its second-worst growth quarter since 2013. Worse, the company’s revenue growth slowed to 6 percent compared to 41 percent the year before. Like Snap, Google blamed most of its difficulties on decreased digital ad spending.
Until recently, it would have been unheard of for Silicon Valley’s previously unrivaled growth juggernaut to show a revenue loss for two consecutive quarters. It is arguably Meta’s worst error to date.
Comparatively, the company’s $27.7 billion revenue was down 4% from the previous year. According to The Wall Street Journal, the company’s market capitalization fell below $300 billion for the first time since early 2016 due to this dismal performance.
CEO Mark Zuckerberg predicted that future earnings would be even more down in the company’s earnings call, citing “major reforms to operate more efficiently.”
Jim Cramer, a television commentator and professional screamer, could not hold back tears on live television as he urged people to acquire Meta’s shares due to the company’s poor performance.
Cramer repeatedly confessed that he had placed too much faith in Meta’s management team. “I messed up,” Cramer said.
