iPhone sales help Apple beat Q4 estimates, holiday forecast disappoints amid weak demand for iPad, wearables

Apple It delivered a sales forecast for the holiday quarter on Thursday that missed Wall Street expectations, hurt by weak demand for iPads and wearables, sending its shares down nearly 3 percent in after-hours trading. . Chief Executive Tim Cook stressed that the company’s new iPhone 15 The models were performing well in China, trying to ease Wall Street’s concerns that Apple was losing market share to a resurgent Huawei and other local smartphone vendors. Apple’s revenue from China declined 2.5 percent overall in the fiscal fourth quarter ended Sept. 30, though Cook said the increase was offset by foreign exchange rates.

Chief Financial Officer Luca Maestri told analysts on a conference call that sales for the current quarter, which includes the Christmas holidays and when Apple typically makes its biggest sales of new iPhone The models will be the same as last year. Wall Street had estimated sales to rise 4.97 percent to $122.98 billion (roughly Rs. 10,23,790 crore).

Apple shares, which have risen 37 percent so far this year, fell 3.4 percent after hours after the forecast.

Maestri said Apple expects iPhone sales to be higher in the fiscal first quarter, even though this year’s holiday quarter saw one week fewer sales than last year.

“I will say that it was surprising to see how much confidence there was Tim Cook “There were a number of potential geopolitical challenges to China’s performance going forward that we know exist for the market,” said Bob O’Donnell, chief analyst at Technalysis Research.

Apple on Thursday reported fiscal fourth-quarter sales and profit that beat Wall Street expectations, helped by surging iPhone sales and a $1 billion (roughly Rs. 8,325 crore) surge in services revenue. , which offset the major decline. mac And ipad Sales.

Cook said that the company’s new high-end handset model – the iPhone 15 Pro And pro max Equipment – ​​facing supply constraints.

The Cupertino, California-based company has weathered the global smartphone slowdown better than many of its rivals, but faces an uneven economic recovery in China, a key market.

“While we believe investors should take a sigh of relief as both sales and profits exceeded expectations, gains were modest and we were concerned by seeing weak sales from China,” said DA Davidson analyst Tom Forte.

Apple said sales fell nearly 1 percent in the most recent quarter to $89.50 billion (roughly Rs. 7,45,130 crores), but beat analyst estimates of $89.28 billion (roughly Rs. 7,43,307 crores), according to LSEG data. . Net income increased nearly 11 percent. Profit of $1.46 per share beat analysts’ expectations of $1.39 per share, according to LSEG.

Apple is facing tough competition in the smartphone market this year as Huawei Technologies has returned to the fray with new phones powered by Chinese-made chips after being out of the market for several years due to US government trade restrictions.

Apple’s sales in China fell to $15.08 billion (roughly Rs. 1,25,544 crore) from $15.47 billion (roughly Rs. 1,28,791 crore) in the fourth quarter a year earlier. Cook said that after taking into account foreign exchange rates, Apple’s business in China grew year over year, driven by iPhone sales and services revenue.

“In the mainland China“We set a quarterly record for iPhone in the September quarter. We had four of the top five best-selling smartphones in urban China,” Cook told Reuters.

Cook said Apple is “working hard to build more” iPhone 15 Pro and Pro Max devices. “We believe that at the end of this quarter, we will reach supply-demand balance.”

For now, the iPhone remains Apple’s biggest seller. Fourth-quarter sales were $43.81 billion (roughly Rs. 3,64,732 crore), in line with analysts’ expectations, according to LSEG data.

“We expect its performance to improve further in (Apple’s fiscal first quarter) as supply issues for the top Pro and Pro Max models will be resolved by then,” said IDC analyst Nabila Popal. “The most premium models are being prioritized across all segments of demand and we expect an even larger proportion of those models this year than last year,” he said.

The performance of the personal computer market is also expected to be better in the coming year. Earlier this week, Apple launched new Mac machines.

Still, Mac sales fell by a third to $7.61 billion (roughly Rs. 63,355 crores) and iPad sales fell 10 percent to $6.44 billion (roughly Rs. 53,615 crores), compared with expectations of $8.63 billion (roughly Rs. 71,847 crores) and $6.07 billion (roughly Rs. 71,847 crores). Was done. Billion (approximately Rs 50,534 crore) respectively.

According to LSEG data, sales in Apple’s wearables segment, which includes the Apple Watch and AirPods, fell 3 percent to $9.32 billion (roughly Rs. 77,591 crore), below estimates of $9.43 billion (roughly Rs. 78,507 crore). .

Apple has faced declining Mac and iPad sales for several quarters, and the trend continued in the fourth quarter.

Sales at Apple’s services segment, which includes Apple TV+ and which recently inked a deal with global soccer superstar Lionel Messi, rose 16 percent to $22.31 billion (roughly Rs. 1,85,748 crore), beating analysts’ estimates. Was 21.35 billion dollars (about Rs 1,85,748 crore). 1,77,755 crore).

© Thomson Reuters 2023

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