Retailers saw a decline in Apple sales by the end of 2021 – 22 as consumers
Apple suffers its greatest sales drop in almost a year.
Comparing the three months ending in December to a similar period in 2021, profits at the iPhone major dropped by 5%.
It was the worst drop since 2019 and a lot worse than anyone had anticipated.
This revision was released when numerous businesses issued dire predictions of a severe economic slowdown, particularly in the technology industry, which had seen a period of unprecedented growth prior to the epidemic.
Apple CEO Tim Cook has stated that the company is dealing with a “difficult climate.”
He attributed the drop in sales to a combination of factors including supply shortages caused by the Covid-19 disruption in China (where its phones are manufactured), a strong dollar, and broader economic weakness caused by rising prices, the war in Ukraine, and the lingering effects of the pandemic.
The globe is facing unprecedented circumstances, he told investors on a conference call, and Apple is not immune to the fallout.
According to Apple, the worldwide sales dip affected the majority of their product lines.
Even though it is a household name, sales of iPhones were down by more than 8%, while Mac computer sales were down by 29%.
The decreases had an effect on the company’s profitability, which dropped 13% to $30bn (£24bn).
Elevation Partners co-founder and former Apple executive Roger McNamee recently told the Channel’s Today show that the business’s supply chain in Beijing was its largest problem.
He said, “Apple, which has historically done the large bulk of its production in China, has had supply chain issues,” and added, “China has taken a more aggressive approach with Major economies over the past year and a half.” This is in part because of China’s zero-tolerance policy on Covid, but he also cited other geopolitical factors and Apple’s problems with its supply chain.
“How severe Apple’s demand issues remain unknown. It’s very evident that they can’t obtain all the material they require.”
Apple, like many other electronics companies, is having trouble convincing customers to upgrade due to “what is seen to be advancements on earlier models,” according to PP Foresight analyst Paolo Pescatore.
“Even more so in these times of widespread frugality,” he remarked.
- A compensation decrease of over 40 percent is in store for Apple’s CEO this year.
- In an effort to save expenses, Amazon has announced that it will be eliminating 18,000 employees.
Market research firm Canalys reports that worldwide smartphone shipments fell by 12% in 2017.
With more than 2 billion users of Apple devices in the world, company executives said they anticipated continued growth in the services business. This includes Apple Pay and Apple News.
Finance officer Luca Maestri told investors that the company expected sales to continue declining in the months ahead despite the positive outlook provided by the company’s installed base.
Updates to investors also revealed that other large tech businesses were feeling the heat.
With its e-commerce business flagging, Amazon reported a 2% decline in sales for the last three months of 2022 compared to the same period the year before.
Stronger growth in Amazon’s cloud computing sector contributed to a 9 percent increase in quarterly sales, bringing Amazon’s total revenue to $149.2 billion.
However, its profits plunged, from $14.3bn a year ago to virtually nothing, a trend that chief financial officer Brian Olsavsky warned investors would likely persist in the coming months.
In the three months ending in December, sales at Alphabet, Google, and YouTube’s parent company, were up a meager 1% compared to the same period in 2021, as businesses reduced spending on advertising, the company’s primary source of revenue, due to economic uncertainty.
According to Mr. McNamee, “the problems facing Google and Amazon are very similar.”
“During the pandemic, business was fantastic for both companies since people remained home from work and entertainment. This was also great for other internet companies like Meta. The situation has calmed down now that we’ve returned to work.”