Apple: Demand for iPhones rises despite pressure from component shortages

THE Apple Inc said yesterday that pressures from a shortage of parts are easing and that demand for iPhones is growing, even as consumers cut back on other spending. Thus, the company exceeded the expectations of Wall Street by predicting a faster increase in its sales for the next period of time.

The price of shares of Apple increased by 3.5% after the announcement of the positive forecast.

Despite the fact that macroeconomic data indicators around the world have a negative sign, Apple’s chief financial officer Luca Maestri told Reuters that there was no decrease in demand for iPhone handsets, which are also the company’s biggest source of revenue.

Apple’s smartphone sales in the third quarter of the fiscal year increased by 3% to $40.7 billion, with Wall Street bracing for a 3% decline. On the other hand, total global smartphone sales fell by 9% during the financial quarter just ended, according to available data (Canalys).

Apple’s loyal and affluent customer base has helped the company ride out the turmoil from declining consumer spending better than peers in the industry in the past, while the company’s strong quarterly results suggest a similar development is in the offing. .

THE Runar BjorvdeCanalys Research analyst announced “Apple in this dimension has a key dynamic that will allow it to suffer the least consequences compared to many of its competitors”.

However, the company hinted that it is closely monitoring the developments.

The negative course of the economy is affecting advertising sales, sales of technological gadgets, but also household appliances, as Maestri stated in an interview, characterizing the above categories of services and products as “points of weakness” in relation to the decline in consumer demand.

“Fortunately, we have a wide range of products. Thus, we know that we will be able to deal with the situation”, he added.

The results show that Apple’s advertising activities, which include the sale of ads along with news, combined with search results in the mobile technology app store, are sensitive to cuts in product promotion strategies, as their competitors have done. , Snap Inc and Meta Platforms Inc.

The shortages in components and appliance spare parts will continue to be obstacles to sales of Mac and iPad devices, Maestri said, despite the fact that the impact is waning. The reported shortfalls cost Apple $4 billion in the quarter ended June 25, short of estimates. Maestri said the company expects the impact to diminish further in the current fiscal quarter.

However, Apple faces the risk of finding itself on the same path as its competitors in terms of the backlog of unsold tablets and PCs that remain in warehouses, in the event that more consumers than forecast, decide not to make their purchases, due to the upward trend of inflation, but also of interest rates.

“In terms of possibly testing for demand, you can’t really do that unless you have the necessary supply chain,” Apple CEO Tim Cook told analysts on Thursday. “We are essentially away from the last quarter, while we have an estimate for the course of demand. But it’s an appreciation.”

Citing economic volatility, Apple said it would not provide specific guidance on its revenue path, but said sales compared to their year-ago level should grow faster in the current quarter, versus the increase of the 2% they recorded in the quarter just ended.

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