Apple set to post rare revenue drop as focus shifts to demand rebound - Reuters

Feb 1 (Reuters) - Apple Inc (AAPL.O) is expected to study its archetypal diminution successful quarterly gross successful astir 4 years aft strict COVID-19 curbs successful China rapped the system and related protests upended iPhone accumulation astatine its biggest supplier Foxconn (2317.TW).

Investors volition look for details connected however Chief Executive Tim Cook is trying to bolster request successful a anemic system that has prompted wide layoffs successful the tech industry, a determination Apple has truthful acold avoided acknowledgment to frugal hiring during the pandemic.

"With proviso concatenation challenges mostly normalized, we present judge Apple is entering a play of slower request owed to macro factors," said Cowen expert Krish Sankar, adding that helium expects 2% less iPhone units to beryllium sold successful 2023.

The world's biggest nationalist institution is expected to study connected Thursday that iPhone income fell astir 5% for the all-important vacation quarter, according to Refinitiv. The past clip iPhone income slipped was successful the August-October play successful 2020, months into the COVID-19 pandemic.

UBS analysts expect iPhone income to person held up amended successful the United States than China and Europe, arsenic the economies reeled from the interaction of COVID-19 and the Russia-Ukraine war.

Some request for the iPhone volition apt beryllium pushed into the existent 4th aft proviso restrictions successful the archetypal 4th and immoderate request mislaid owed to deficiency of merchandise availability successful the vacation period, BofA expert Wamsi Mohan said.

The services business, a cardinal maturation motor for the institution and location to Apple's euphony and video streaming services, is acceptable to station its lowest gross maturation for the vacation 4th - different fallout of consumers limiting spending.

THE CONTEXT

The disruption astatine the world's biggest iPhone works successful Zhengzhou, China triggered a uncommon warning from Apple successful November and constricted stocks of its higher-end iPhone 14 models during what is typically its biggest income quarter, powered by merchandise launches and the holidays.

Greater China, including Hong Kong, is cardinal to Apple's fortunes, contributing astir a 5th to yearly revenue. The Cupertino, California-based tech behemoth had successful 2019 pared its full income forecast owed to an economical slowdown successful the state pursuing the Sino-U.S. commercialized war.

Analysts, however, expect a much-faster betterment this clip arsenic factories have restarted successful China and Apple diversifies its accumulation footprint with plants successful India.

"Commentary from luxury goods companies indicates China is rebounding quickly, which implies Mar-qtr Chinese iPhone income should beryllium amended than expected," Evercore ISI analysts said successful a note.

FUNDAMENTALS

** Revenue estimated to person fallen 2% successful the past 3 months of 2022, Apple's archetypal fiscal quarter.

** IPhone income apt fell for archetypal clip since 2020, portion services concern roseate 6%.

** Analysts expect nett income to person dropped 10.4%; net per stock of $1.94

** Apple's shares fell astir 27% successful 2022 and person gained astir 10% successful January

WALL STREET SENTIMENT

** Since October, analysts person lowered immoderate forecasts connected Apple for the archetypal quarter

Reporting by Nivedita Balu and Akash Sriram successful Bengaluru; Editing by Sayantani Ghosh and Sriraj Kalluvila

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