Apple weathered supply-chain constraints in late 2021 that plagued the global electronics market and other industries, on Thursday reporting an 11% increase in revenue and a 20% increase in profit in the year to date. most recent quarter while giving optimism that the worst of the problems behind it.
Apple, the world’s most valuable public company, beat Wall Street analysts’ expectations with its record results, alleviating concerns that the tech industry’s period of rapid growth has may be coming to an end. It made $34.6 billion in profit on revenue of $123.9 billion in the three months ended December, although its revenue growth continued to slow.
As usual, the iPhone drove sales for Apple, which quickly surpassing $3 trillion in market value early January before sliding back to around $2.6 trillion on Thursday. Total iPhone sales reached $71.6 billion, up 9% from a year earlier. Demand for the latest iPhone 13 sold out, but the company has warned for months that computer chip shortages and pandemic-related manufacturing issues in Asia are likely to limit supply and hinder revenue.
Global chip shortage has hurt a wide range of industries, including consumer electronics and automotive. On Monday, Gina M. Raimondo, Commerce Secretary, said the United States is facing an “alarming” shortage of semiconductors.
Understanding the supply chain crisis
Tim Cook, Apple’s chief executive, said in October that supply constraints cost his company $6 billion in revenue in the fall quarter. On a call with investors on Thursday, he said Apple “experienced supply constraints higher than the September quarter” during the holiday season, but he declined to give specific numbers.
Mr. Cook said he saw light at the end of the tunnel for Apple: He expected supply problems in the current quarter to be less than during the holidays.
“We pride ourselves on getting the product to the customers who really want it and we try to do it quickly, and so it’s frustrating that we can’t always do it that fast. desired level,” he said in the call earnings section. “However, March is better than December, and so there are some encouraging signs there.”
Cook said much of the difficulty stems from buying a specific type of computer chip, but he doesn’t think those difficulties require Apple to reevaluate how its supply chain operates.
“I think our supply chain really does a good job when it comes to shortages, because it’s a fast moving supply chain,” he said.
Apple saw sales growth worldwide, led by a 20% year-over-year increase in China and 19% in the rest of the Asia-Pacific region. Binh Duong, although sales in Japan fell 14% year-on-year. Mr. Cook said iPad sales were particularly constrained by supply chain problems; The company reported a 14% drop in tablet sales year-over-year.
Apple announced a bunch of new hardware products this fall, including new MacBook Pro laptop models, AirPods, iPads, and Apple Watch. It is working on an augmented reality headset that could compete with products from companies like Meta, the parent company of Facebook, like technology companies increase the influence of technology companies in the budding metaverse, a futuristic online universe.
Cook ignored a question about how Apple was thinking about the metaverse during the earnings call, saying, “We see a lot of potential in this space and are investing accordingly.”
How is the supply chain crisis unfolded?
The pandemic has sparked the problem. Complex and interconnected global supply chains are in flux. Much of the crisis can stemming from the outbreak of Covid-19, causing an economic downturn, mass layoffs, and production shutdowns. Here’s what happened next:
Apple also benefited from strong growth in its services business, including the App Store, which Mr. Cook described as an “economic miracle for developers around the world”. even when it continue to face accusations that it discourages competition and charges heavy fees for application developers. The services business grew nearly 24% in the quarter from a year ago, to $19.5 billion.
Apple also said it plans to use nearly $27 billion of its cash to pay dividends to shareholders. Shares of Apple rose more than 4% in after-hours trading on Thursday night.
Apple’s positive results come near the end of a busy week in the stock market, driven in part by concerns about how quickly the Federal Reserve might raise interest rates in an effort to contain inflation. Higher interest rates make riskier investments, like tech stocks, less attractive, adding to concerns that the pandemic that drives tech companies may soon be over.
But Microsoft and Tesla, despite facing its own supply chain troubles, posted record profits this week and beat industry expectations. Next week, Alphabet, the parent company of Google and Amazon, will report their results for the last three months of 2021, providing insights into the health of online advertising and retail.
https://www.nytimes.com/2022/01/27/technology/apple-earnings.html Apple’s profit spiked to $34.6 billion in the holiday quarter despite supply problems.