On July 28, Apple released its latest quarterly financial report. Although the weak economy affects consumer spending, iPhone sales remain strong. However, Apple 's service revenue hit the lowest growth rate in seven years.
In the latest quarter, Apple's revenue reached US$83 billion, and increased by 2% year-on-year, but it was far lower than the 36% growth in the same period last year and 8% growth in the previous quarter; in the latest quarter, Apple's iPhone sales reached US$40.7 billion, an increase of 3%. After the financial report of
was announced, Apple's stock price rose by more than 3% after the market trading. Apple CEO 1 Cook expects Apple revenue to accelerate growth in the quarter ended September.
Following the signal from chip manufacturers and other electronic device suppliers that global demand for smartphones and personal computers is slowing as consumers cope with recession concerns and decades of high inflation. According to research firm canalys, the overall global smartphone market fell by 9% in the past quarter.
Apple iPhone strong hardware sales are related to customer loyalty and a relatively wealthy customer base, whose consumer spending is less affected by the weak economy.
Canalys Research analyst Runar Bjorhovde said after Apple's financial report was released: "Apple has a certain degree of robustness, which will make it less affected than many competitors."
At the April financial report conference, Apple warned that challenges from the supply chain could lead to a decrease of US$8 billion in total sales, but at present, this supply chain tension is slowing down.
However, Apple is still cautiously warning the company about risks, including rising dollar exchange rates. exchange rate has caused many foreign companies with more income to receive less income. Apple said exchange rate fluctuations caused sales to fall by 3% for the quarter ended June, and sales are expected to fall by 6% for the quarter.
In addition, the epidemic in China has also affected Apple's sales in China. In the past quarter, Apple's Chinese sales fell 1% to $14.6 billion.
While sales of iPhone and iPad exceeded expectations, Apple's service business hit its lowest growth rate since the fourth quarter of 2015. In 2021 and 2020, the revenue growth rate of Apple's service business was 27% and 16% respectively; in the same period last year, the revenue growth rate of Apple's service business was 33%.
Apple's service department revenue includes Apple Music , iCloud storage, Apple mall revenue, Apple payment and warranty, etc. Apple's chief financial officer Luca Maestri expects Apple's services business to grow below 12% in the quarter ended September.
Apple said that as of the current quarter, Apple's service has reached 860 million paid users, up from 825 million in the previous quarter. Apple's service division's gross profit margin in the last quarter was 71.5%, far higher than Apple's overall gross profit margin of 43.3%.
Morgan Stanley believes that service growth is a key investment driver for Apple's continued growth. "If Apple focuses on expanding its services, its long-term valuation could rise by 30%. "If Apple focuses on expanding its services business, it is likely to rise by 30%. The agency wrote in a report earlier this month. "Highlights in the growth rate of its services business, Cook said the service department has been affected by the economic situation, and he also specifically mentioned the advertising business, although the business still accounts for a small proportion of revenue. "Digital advertising is clearly affected by the macroeconomic environment," Cook said.
Apple is expected to release a new iPhone in September, and the market also expects the company to launch a new mixed reality headset next year, which will become another new product category Apple has released since 2015.
To cope with challenges in inflation and supply chains, Apple is also reducing spending, such as slowing recruitment as other tech companies including Meta and Tesla . As of the company's previous annual report, Apple has about 154,000 full-time employees worldwide.
