Apple reported lower iPhone sales in the holiday quarter compared with the same period a year ago. The earnings report showed that the company missed analysts' expectations for revenue, profit, and sales. Apple's stock crashed 3 percent after the tech giant said the first quarter iPhone sales were nearly 5 percent lower than last year's.
Revenue at $117.1 Billion
The tech giant also said its revenue was $117.1 billion, but the analysts' consensus was a revenue of $121.1 billion, as per Bloomberg's compilation. Also, the report showed that earnings per share stood at $1.88 compared with expectations of $1.94.
Apple said revenue from the flagship iPhone was $65.7 billion and Mac revenue was $7.7 billion. It made $13.4 billion from wearables $20.7 billion from services.
Apple CEO Tim Cook explained that factors like strong dollar, production niggles in Chinese plants that hit iPhone 14 Pro and iPhone 14 Pro Max models contributed to the lower performance.
"On the third factor, I would say was just the challenging macroeconomic environment, and you're hearing that from, I would think, everybody," Cook told CNBC.
Cook emphasized that the focus has always been on the long term. "As we all continue to navigate a challenging environment, we are proud to have our best lineup of products and services ever, and as always, we remain focused on the long term and are leading with our values in everything we do," Cook said.
It was reported last November that Apple was expected to report a huge shortfall on iPhones. Unrest in the Chinese city that hosts Foxconn's mega iPhone plant will hit Apple hard, crippling its output and threatening deliveries, reports had said. The tech giant was looking at a production shortfall of as many as 6 million units of iPhone Pro this year, Bloomberg had reported.
Production Back to Normal
Foxconn's Zhengzhou plant, which produces Apple's popular iPhone 14 models and accounts for 70 percent of global iPhone shipments, was rocked by severe protests. Mass resignation of technical staff at the huge Foxconn plant was feared to have upset Apple's production and delivery targets, but the impact would be more serious than previously estimated, as per the latest report.
Apple's iPhone shipments crashed nearly 15 percent year-over-year, according to IDC's Worldwide Quarterly Mobile Phone Tracker. While total shipments stood at 85 million units in the fourth quarter of 2021, it came down to 72.3 million units in the fourth quarter of 2022.
Cook explained that iPhone supply issues in China are now resolved. "We put out an update on that on November 6th and it lasted through most of December ... So we had a big hole there," he said.
"Production is now back where we want it to be," he added.