Image source: Apple Toolbox
Despite the struggling economy, tech giants Apple managed to produce some positive numbers – most of which can be attributed to its smartphone business.
Due to how well the iPhone sells, the industry rarely notices any shortcomings in Apple’s businesses.
In fact, reports from the latest quarter show that the iPhone sales performance was strong.
However, behind the performance is an underlying plethora of worries.
Apple delivered a quarterly report last week that instilled confidence in the market amid supply chain challenges, the economic downturn, and the fallout from pandemic.
The company’s third-quarter revenue ($83 billion) aligned with Wall Street’s expectations.
The iPhone sales generated over half the revenue, beating analysts’ expectations.
Apple anticipated supply chain hurdles would hit up to $8 billion in revenue, and the results indicate it was only an exaggeration.
Despite the strong iPhone sales, other areas didn’t show the same success.
Decline in revenues
Apple has three major products outside the iPhones – the Mac, the iPad, and wearables.
Each of the products experienced year-over-year revenue declines, but while the iPad exceeded analyst expectations, the other two fell short.
Early analysis claimed that the Mac decline was expected, but analysts failed to predict such a decline.
The MacBook Air and MacBook Pro are Apple’s flagship laptops, and their sales have been stagnant for almost four weeks over the quarter.
However, the sales can be attributed to the release of the M2 versions of the MacBook Air and MacBook Pro weeks later.
The MacBook Pro went on sale on June 26 while the Air appeared on July 15.
The launch delay meant sales came to a screeching halt, resulting in Mac sales going down in the fiscal third quarter by about $1 billion from a year before.
Mac sales are expected to improve next month, with many optimistic about the category.
People also believe the declining revenue is only temporary.
Experts speculate the MacBook Pro and MacBook Air will grow substantially in the fiscal fourth quarter.
Apple is also expected to gain more momentum with the release of a new Mac mini and higher-end MacBook Pro later this year.
The MacBook sales were better compared to the iPad, which has been a major concern for Apple.
It was reported that many buyers were unable to find the tablet they wanted in retail stores the past year.
Industry insiders believed the iPad Air and iPad Pro were too similar, confusing buyers. Additionally, the Pro model’s inadequacies in multitasking was a downside.
Apple blamed lower iPad Pro sales for the tablets’ decline.
However, the company hasn’t experienced demand issues due to supply shortages.
Other Apple products that saw declining sales include the Apple Watch, AirPods, Beats headphones, HomePod, and Apple TV.
The product sales were heavily affected by supply chain issues, the Russian invasion, and chip shortages.
Apple CEO Tim Cook highlighted the economic impact of wearables, saying the economy hindered people’s desire for the products.
He pointed out that the AirTag could be one of the reasons for the decline.However, they also upgraded Apple TV in the third fiscal quarter of 2021.
Despite the two factors, they weren’t enough to explain the year-over-year revenue decline of $750 million.
In an interview with Bloomberg Television, Tim Cook revealed that Apple will continue to hire and invest amid the downturn in a more “thoughtful” way.
Reports indicate that the company hit the brakes internally with staff growth compressed.