After weeks of rumors that demand for its most recent phones is lower than initially believed, Apple is about to find out for the first time how well the iPhone 14 is selling.
Apple will release its financial statistics for the September quarter, which includes around two weeks’ worth of sales of the iPhone 14 series, on Thursday in the afternoon. Even though the window of opportunity is small, Apple’s numbers and comments for the Christmas quarter may shed some light on how the company and its main products are handling the economic downturn, which has hurt the performance of other IT companies.
Following a rumor that the company had abandoned plans to increase manufacturing of the iPhone 14 range in the second half of this year due to lower-than-expected demand, Apple’s (AAPL) shares momentarily fell last month. (A request for comment at the time received no response from Apple (AAPL).)
Analysts expect Apple to report revenue.
Analysts expect Apple to report revenue of $88.9 billion, up more than 6% year over year. Nonetheless, this represents a significant slowdown from the 29% sales increase the company reported in the corresponding period last year. The anticipated net profit is nearly $20.4 billion, or around the same as it was a year ago.
The kinds of game-changing new features and dramatic hardware redesigns that compel many consumers to upgrade, whether they actually need a new phone or not, have been missing from recent Apple iPhone launches. But this year, with customers struggling with high inflation and worries about a potential recession, it might be even more difficult to persuade them to spend $799 or more on a new device. People who don’t reside in the US can see Apple’s products as being more expensive due to the strength of the US dollar. These people account for a sizable portion of Apple’s revenue.
Dan Morgan, a senior portfolio manager at Synovus Trust Company, says that the consumer electronics industry will grow slowly over the next few years.
Analysts claim that there are some grounds for optimism. According to CFRA Research’s senior stock analyst Angelo Zino, the more expensive iPhone 14 Pro appears to be the most in-demand of the new models. The average selling price of all iPhones will probably increase as a result.
Apple no longer discloses how many iPhones it sells separately. When it only shows the total revenue from the product section, it is harder to get a clear picture of demand.
The performance of Apple’s services division, which includes its paid subscriptions and is seen as an increasingly important part of the company meant to offset slowing growth in some areas of its hardware business, is another thing that Apple watchers expect to keep a close eye on.
In a Friday investor note.
In a note to investors on Friday, Brian White, an analyst at Monness, Crespi & Hardt, said that he expects the growth in services revenue year-over-year to slow down to 10% from 13% in the last quarter.
A decline in service demand may be influenced by shifting consumer behavior. CFO Ruth Porat stated that Google Play revenue was down somewhat due to a fall in user spending on the platform and, in particular, a decline in engagement in gaming from earlier in the month during this week’s earnings call for Google parent Alphabet.
Apple increased the cost of its music and TV streaming services earlier this week, which may increase future sales.