Apple finally announces iPhone 14 sales after weeks of rumors of falling demand as people expect the lineup to fail.
September quarter earnings report
Apple released its results for the September quarter, including two-week sales of the iPhone 14 line.
Despite the limited time, the company’s results and commentary for the holiday quarter provide insight into its performance and core products.
Like many other companies in the tech industry, Apple is currently facing an economic crisis.
Apple shares fell last month after the company scrapped plans to ramp up production of iPhone 14 models.
The plans were proposed due to lower-than-expected demand.
Analysts expect the company to reach $88.9 billion in revenue, up more than 6% year-over-year.
This marks a 29% slowdown in revenue growth in the quarter a year prior.
Apple was expected to post a flat profit from the previous year at $20.4 billion.
Recent Apple iPhones lack groundbreaking features and major hardware redesigns that encourage users to upgrade.
Consumers are facing high inflation this year and fear a potential recession, which makes it challenging to get them to buy a new device.
The dollar’s strength makes the devices more expensive for international consumers, which make up a significant part of Apple’s business.
Dan Morgan, a senior portfolio manager at Synovus Trust Company, issued a note to investors in which he states:
“The consumer electronics industry is headed for a period of slow growth.”
Apple no longer focuses on the number of iPhone units sold.
Now, the total sales of the product segment are the focus, complicating the demand analysis.
Apple watchers are likely to focus on company services like paid subscriptions.
The segment is a fundamental business unit to offset slowing growth in parts of the hardware business.
Monness, Crespi, Hard analyst Brian White says services revenue growth will slow slightly to 10% year-over-year.
The shifting consumer behavior could also lead to slower services.
In addition, CFO Ruth Porat reveals that Google Play’s revenue was down slightly this week.
The decline is down to user spending on the platform and engagement in games since the early pandemic.
Earlier this week, Apple raised music and TV streaming services prices to boost future sales.