On the one hand, Apple Mac and iPad revenues are shrinking and the tech goliath is doing less business in China and Japan.
On the other hand, it reported this week a better financial quarter than expected, in some respects, showing some resilience in uncertain times.
Sales were up two percent year-on-year to $82.96 billion for Cupertino’s third quarter of its fiscal 2022 – the three months to June 25 – “despite supply constraints, over 300 basis points of foreign exchange headwinds, and the impact of our business in Russia,” said Apple CFO Luca Maestri.
Dare we say that perhaps some folks are also not that keen on buying pricey personal computers right now when their previous hardware works just as well?
I know Apple says it’s a supply chain issue holding up MacBook sales. But I really think it’s the fact the M1/M2 is more than most people need and anything with a M1-Pro/Max/Ultra is so expensive that most can’t even consider it in this economy. Just a thought. #apple
— Tobias Mann (@Tobias_Writes) July 29, 2022
The headline revenue figure was in line with market expectations; Apple’s GAAP earnings-per-share figure of $1.20 beat Wall Street’s estimate by five cents.
On the product side, revenue [PDF] was down $593 million on the same quarter of 2021 to $63.35 billion – down less than one percent – and the services side saw a 12 percent growth to $19.6 billion versus $17.49 billion this time last year.
In April, Apple warned that lockdowns in Shanghai would hurt fiscal Q3 sales – hitting all products divisions – and lowered its revenue outlook by $4 billion to $8 billion.
“We saw great enthusiasm for our products and services, resulting in an all-time record for our installed base of active devices,” said CEO Tim Cook on a conference call with Wall St analysts on Thursday. “Our supply constraints were less than we anticipated at the beginning of the quarter, coming in slightly below the range we discussed during our last call.”
Revenues from iPhone sales went up three percent to $40.67 billion as customers continued to respond well to the latest iPhone 13, Maestri said. The Mac division brought in $7.38 billion, down more than 10 percent due to to those component supply issues, and the iPad revenues dipped about two percent to $7.2 billion for similar reasons.
“We continue to have supply constraints with Mac, but we’re encouraged by the strong response from customers to our incredible lineup,” Cook insisted.
“iPad, like Mac, continued to see strong demand during the June quarter despite ongoing supply constraints.”
Wearable, Home and Entertainment was also down eight percent to $8.1 billion, and “supply constraints as well as the overall macroeconomic environment” was blamed.
In a cursory mention of the enterprise market, Maestri claimed businesses are “increasingly investing in Apple products as a strategy to attract and retain talent.” Apple formed relationships with IBM and Cisco years back though B2B still seems to be a relatively small portion of Cook & Co’s overall business.
“Bank of America is providing iPhones to all of its financial advisers so they can instantly access client information and provide timely wealth management advice from anywhere. Wipro, another large global enterprise customer, is investing in MacBook Air with M1 as a competitive advantage when recruiting new graduates globally,” said the CFO.
The Americas region grew 4.4 percent to $37.45 billion, Europe edged up to $19.29 billion, and China slipped slightly to $14.6 billion, Japan dropped 15.7 percent to $5.44 billion, and the rest of Asia Pacific was up to $6.15 billion versus $5.39 billion this time last year. ®