Apple has released a profit forecast for the first quarter of the fiscal year 2023, which ended on December 31 for the company. Apple's revenue is expected to decrease for the first time since Q2 2019. The main causes are said to be a decline in iPhone sales due to a strong dollar and general macroeconomic factors. The company's stock is expected to decrease by 4%.
Apple's revenue was $117.2 billion, down 5.49% from the same time last year. It's also well below analysts' expectations of $121.1 billion in revenue. Earnings per share was $1.88, down 10.9 percent year on year.
Apple faced a number of challenges during the first quarter of fiscal year 2023. The biggest of them were lockdowns due to COVID-19 and related disturbances at the largest iPhone assembly plant in Zhengzhou, China.
In a report, Apple stated that iPhone sales generated $65.8 billion in revenue last quarter, compared to $68.3 billion predicted by analysts. Sales of wearables and other Apple devices last quarter fell by 8.3% year-on-year to $13.48 billion, also below market expectations of $15.23 billion.
This part of the business generated only $7.74 billion, which is 28.56% less than last year, and also significantly less than analysts' expectations of $9.6 billion.
The only hardware segment that saw growth in the last quarter was the iPad — its sales increased immediately by 29.66% to $ 9.4 billion and significantly exceeded analysts' expectations of $ 7.76 billion. This is due to the release of new models and the absence of a shortage, which had impeded Apple tablets' sales a year earlier.
Apple Services, which includes Apple Music, Apple TV+ audio and video streaming services, the App Store, Apple Pay, iCloud, and other services, increased by 6% year on year, slightly better than expected. analysts at $20.7 billion. Cloud services, payments, including Apple Pay and Apple Card, and music are key areas of Apple services. Apple employees are currently beta-testing a "buy now, pay later" installment plan that will become one of its services.
Apple's CFO Luca Maestri said the company expects Mac and iPad sales to decline by two figures in the current quarter, while smartphone sales will decrease in comparison to the previous quarter.
Apple's investors are waiting to see if the company will explore other market segments this year. There are great expectations for Apple's plans to release a flagship mixed reality headset this year that might cost around $3,000. Moreover, there are rumors that the company is developing a more affordable AR/VR gadget.
Apple has not announced major layoffs, but it has also reduced its recruitment and is very careful and considerate about the people it hires.
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