Even with supply chain constraints, Covid lockdowns in Shanghai, and a war in Ukraine, Apple managed another record quarter, earning €97.3 billion, fueled primarily by a seemingly huge lineup of (*13*)13s. received.
The Cupertino, California company released earnings figures last Thursday and followed an earnings call with analysts who, while painting a mostly positive picture, described warning signs in the supply chain: supply, Covid, inflation and headwinds. Europeans.
Consumers shopped across virtually every product category Apple has to offer, driving the (*13*) to €50.5 billion in total sales, the Mac to €10.4 billion, wearables to €8.8 billion and the fast-growing services category (which now has €825 million paid). subscribers) to €19.8 billion.
If there was one caveat among the pack, it's the iPad, which fell 2% year-over-year to €7.6bn. “We continue to see such strong demand for the iPad even as we face severe supply constraints,” Apple CEO Tim Cook said on the earnings call.
The story of the iPad, which recently saw the launch of the iPad Air with an M1 chip, is not that it didn't sell poorly, but that getting the components to build the product (for iPad and Mac) is harder than ever.
The topic of supply constraints and, in particular, silicon shortages came up several times during the call, as the analysis questioned whether Apple should do anything to shore up supplies.
Cook basically scrapped the idea. "In today's world, it's impossible for us to have a seal on silicon. It goes from factory to final assembly very quickly."
The Mac was another bright spot for Apple, which attributes much of this growth to Apple Silicon (the M1 line of chips). The commitment to Apple Silicon, noted Apple CFO Luca Maestri, is reflected in earnings. He said they had the best eight quarters ever for the Mac.
A difficult road to travel?
Apple, like other companies around the world, is starting to get back on track and Cook said Apple was delighted to welcome employees back to its offices, but added that it was "still monitoring Covid-related disruptions in China".
The topic of Covid and disruptions to the Shanghai factories that assemble many Apple products came up repeatedly. Cook tried to paint a positive picture. "On a positive front, almost all final assembly plants have restarted. It is also encouraging that the number of Covid cases in Shanghai has decreased in recent days," he told investors.
Still, the lockdown had little effect this quarter and appears to be part of a grimmer picture in the coming months. Apple, like everyone else, is dealing with component price inflation (although Cook said prices for some components are falling while others are rising), shipping costs, the war in Ukraine, ongoing shortages of silicon.
Speaking of the global challenges we all face, Cook said: “We are not immune to these challenges, but we have great confidence in our strategy and our teams.
Asked how inflation might affect consumer product prices, Cook was hesitant, but made it clear he was keeping an eye on the impact of inflationary pressures on sales.
"Obviously monitoring our daily sales very closely." Cook said Apple is seeing impacts on sales and operating costs in the last quarter and expects it to continue into the current quarter. He added, "definitely seeing a level of inflation that I think everyone is seeing."
Cook and Maestri offered no hint of the call of what was to come. There was hardly any mention of augmented reality, virtual reality, new innovations, futures (*13*) or wearables. The closest anyone has come to offering an idea of what consumers can expect from Apple in the coming months is when it comes to services when Maestri told analysts: "We plan to add new services and features that we believe customers will benefit from." they'll love it." "