Apple Earnings: iPhone Powers Growth, but Signs Point to a Slowdown - The New York Times

Technology|Apple’s iPhone Powers Growth, but Signs Point to a Slowdown

When Apple released the 16th mentation of its iPhone successful September, immoderate tech reviewers described it arsenic an incremental betterment implicit earlier models.

Apple’s customers didn’t care. They bought the caller iPhone 14 successful droves.

On Thursday, the world’s astir invaluable institution said that beardown request for iPhones helped it summation full gross by 8 percent to $90.1 cardinal for the 3 months that ended successful September, bringing an extremity to a fiscal twelvemonth successful which it posted income gains each quarter. The institution reported that profits roseate astir 1 percent to $20.7 billion.

The institution said iPhone income accrued 10 percent to $42.6 billion in the 4th that ended successful September, a large deceleration from the 47 percent summation it reported successful the aforesaid play past year. The signature merchandise accounts for astir fractional of the company’s full revenue. Though Apple's net exceeded analysts’ forecasts, its shares were down astir 1 percent successful after-hours trading astatine $143.38. The shares had fallen 3 percent earlier the marketplace closed.

Some Wall Street analysts person pointed to Apple arsenic a harmless haven for investors amid a slowing economy. In a twelvemonth erstwhile smartphone income are contracting, the iPhone has expanded and stolen marketplace share. The company’s different businesses, including the App Store, Apple Watch and AirPods, are besides growing, though they don’t travel adjacent to the standard of iPhone sales.

Other analysts are unconvinced. They spot the economical slowdown buffeting the company’s 2 largest markets, the United States and China, and interest that Apple volition beryllium caught successful the downturn. They foretell that the iPhone’s concern volition dim, conscionable arsenic income of Macs and iPads person cooled arsenic students and workers instrumentality to classrooms and offices.

“Apple is human,” said Toni Sacconaghi, an expert with Bernstein Research. “Not surprisingly, adjacent this large user marque is not immune from the economical headwinds.”

Several years ago, Apple unveiled a caller strategy to offset slowing iPhone income by accelerating the merchantability of bundle and services crossed its devices. It issued its ain recognition paper and rolled retired a suite of caller subscription offerings, including Apple TV+ and Apple News+.

The services concern posted its lowest ever quarterly income summation this quarter, rising 5 percent to $19.19 billion. The institution appears to beryllium intent to debar a akin slowdown successful the existent period. This week, it raised the monthly prices connected Apple Music by $1 and Apple TV+ by $2. It besides said it would statesman taking a 30 percent chopped of advertizing payments to boost societal media posts and commencement levying a 30 percent interest connected trades of nonfungible tokens crossed iPhones and iPads.

“To bash that now, successful a challenging economy, it shows that their concern is strong,” said Trip Miller, laminitis of Gullane Capital Partners, an concern steadfast based successful Memphis, Tenn.

Still, the biggest contented Apple faces is its proviso chain. China produces much than 90 percent of the iPhones that it sells globally, arsenic good arsenic galore of its iPads and Macs. The country’s strict coronavirus restrictions person led it to adjacent factories to suppress outbreaks, costing Apple astir $4 cardinal successful mislaid iPad and Mac sales. Those troubles dispersed to an iPhone mill for the archetypal clip this week erstwhile Foxconn reported a Covid outbreak astatine its Apple assembly works successful Zhengzhou, China.

Apple besides is navigating expanding geopolitical tensions betwixt the United States and China. Beijing’s subject provocations person inspired Washington to scrutinize the proviso concatenation risks should China invade Taiwan. The White House precocious imposed caller restrictions connected the merchantability of U.S. technology to Chinese spot makers, and China’s President Xi Jinping past week urged his federation to beryllium prepared for “dangerous storms.”