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By Danielle Kaye, Paresh Dave and Nivedita Balu
(Reuters) – Apple Inc. is overcoming an expensive shortage of computer chips around the world, hitting record sales in the holiday quarter, exceeding earnings estimates and predicting a decline in its shortage.
The iPhone maker, the world’s largest company by market capitalization, has faced supply chain challenges, such as factory closures and pandemic delays, better than any of its major members, analysts said. Apple shares (NASDAQ 🙂 rose about 5% in overtime trading, eliminating half of its annual losses. The profits came after the company teased the ambitions of augmented reality in the metaverse https://www.reuters.com/technology/apple-teases-metaverse-ar-plans-stock-jumps-2022-01-28.
More people wanted iPhones, iPads, and other gadgets than Apple had to sell in the holiday quarter, and it cost the company more than $ 6 billion in sales, or in line with fears. However, Apple, the largest customer of many suppliers, used its purchasing power to squeeze enough of these vendors to send enough gadgets to boost its sales record in its iPhone, Mac and laptop and accessory segments. Apple executives said the chip shortage is mostly affecting older models of its products and in particular the slowdown in iPad sales.
“They’ve navigated the supply chain better than everyone else, and it’s showing results,” said Ryan Reith, who studies the IDC industry follower phone market.
The four best-selling phones in the city in China were iPhone models, Apple said, as competitors struggled to fabricate their competitors’ offerings. It was the best-selling vendor in China for the first time in six years, the research firm Counterpoint Research reported on Wednesday.
Nicole Peng, who is still in the Chinese phone sector at Canalys research firm, said the low prices and the retreat of Huawei’s main rival market have led to a strong quarter.
Peng said Apple was unlikely to repeat that quarterly performance this year because of momentary factors. However, he said the company could have a strong 2022 if it warms up with a new iPhone SE that Chinese consumers will release this year.
Apple’s growing sales of services like music, TV and fitness subscriptions are also helping to soften the impact of low device supply. The company said it now pays 785 million subscribers on its at least seven subscription offers, 40 million more than last quarter, and reassures investors concerned about slowing growth in rivals like Netflix Inc (NASDAQ :).
Even better, Apple chief financial officer Luca Maestre told Reuters that alleviating chip shortages would mean a loss of less than $ 6 billion in revenue this quarter. But he refused to appreciate it any more in the future.
“The level of reduction will depend a lot on other companies, which will be the demand for chips from other companies and other industries,” he said.
RECORD NEW IPHONE
The iPhone 13, which began shipping a few days before the start of the quarter, brought worldwide phone sales revenue https://tmsnrt.rs/3o4nuGc to Apple $ 71.6 billion, easily surpassing Wall Street targets by 2020 by 9%. Refinitiv according to the data. Maestro attributed the rise in sales to a record number of upgrades to old iPhones and a double-digit increase in the number of people switching from rivals.
Apple’s first-quarter total fiscal revenue was $ 123.9 trillion, up 11% from last year and higher than the average analyst estimate of $ 118.7 billion. Earnings were $ 34.6 billion, or $ 2.10 per share, compared to analysts ’expectations of $ 31 billion and $ 1.89 per share.
Maestre warned, however, that revenue growth will slow in the current quarter compared to the December quarter, mainly due to less favorable foreign exchange rates and different product launch dates.
The only segment of Apple’s category that lost sales expectations was iPads. Sales fell 14% to $ 7.25 trillion from analysts ’estimates of $ 8.2 billion, which seems to confirm industry predictions that tablets would be a low priority for scarce parts.
Services, Apple’s second-largest segment after the iPhone, saw sales rise 24 percent to $ 19.5 billion.
Mac computer revenue rose 25%, and Apple said the last six quarters were the best for Mac sales.
The pandemic has accelerated the launch of digital tools for communication, learning and entertainment, and Apple has exploded sales in the last two years.
But this year investors have shifted their funds to safer assets and moved away from technology stocks like Apple, which have risen during the pandemic, as people spend more time online.
Wall Street has questioned how long it will take Apple to deliver its next big product, such as an augmented reality headset (AR) headset.
“We see great potential in this area and we are investing accordingly,” CEO Tim Cook told investors on Thursday.
Apple is also under antitrust pressure in the United States and Europe, which could lead to new regulations that reduce the revenue from its services.
At the end of last month, the Dutch Consumer and Markets Authority (ACM) ordered Apple to make changes to the apps offered in the Dutch Apple App Store by January 15 or to receive fines after the US company found that it had abused its market. dominance, requiring dating app developers to use Apple’s in-app payment system exclusively.
However, Apple is trading 27 times the expected profit over the next 12 months. Despite being less than 35 a year ago, it is still 20 times above the company’s five-year average of expected earnings, according to Refinitiv.
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