Apple announced its fiscal Q1 2023 earnings, which shows that Apple generated $117.2 billion in revenue. It has gone down five percent year over year, with earnings of $1.88 per share. The decline could be tied to the sales of the iPhone 14 and iPhone 14 Pro Max.
iPhone 14 Supply Shortage
Apple already anticipated the potential issue of a supply shortage, as they announced longer wait times for the iPhone 14 lineup in early November. The economic situation did not help the sales of Apple's latest model for its flagship phones, causing people to be reluctant to purchase.
This has led to an 8% drop in iPhone revenue, according to The Verge. As for the lack of supply, the delays are brought about by complications from Apple's China-based factory, Foxconn. Workers were said to have disputes with the police force during protests.
The protests were in response to delayed compensation for the workers, as well as difficult working conditions caused by the pandemic's containment measures. This ultimately resulted in Apple not being able to meet the demands for the iPhone 14 lineup.
The iPhone 14 shortage is not the only thing that contributed to the decline in revenue. Wearables such as Apple Watches and AirPods also fell by 8%. Mac sales also dropped by 29%, just as the company predicted.
The net sales for the latest flashship phone went from $71,628 in net sales back in 2021's Q4 to $65,775 in Q4 2022. Mac had net sales of $10,852 in Q4 2021, and went down to $7,735 in Q4 2022.
Read Also: Apple Lands Fourth Place in China Despite Lackluster iPhone 14 Pro Sales
On the Bright Side
It's not all doom and gloom for the tech giant as it has seen rises in revenue for its products and services. Apple CEO Tim Cook stated that during the December quarter, Apple reached the 2 billion active devices milestone. Apple's all-important services division increased by 6%.
iPad revenue also went up by 30%, following the new entry-level iPad that has better specs with the M2 chip, as well as a hover feature for the Apple Pencil. The mentioned iPad is said to have a design similar to that of the iPad Pro and iPad Air.
The net sales for Apple's services went from $19,516 in Q4 2021 to $20,766 in Q4 2022. Apple's financial statement also shows that the iPad's net sales went from $7,248 in Q4 2021 to $9,396 in Q4 2022.
Apple CEO Tim Cook expressed that they are proud to have their best lineup of products and services, despite the challenging environment which has been brought on by the economic situation. He added that they will remain focused on the long term.
According to Apple's website, the company set an all-time revenue record of $20.8 billion in its Services business, despite a difficult macroeconomic environment and major supply constraints. Apple managed to grow total company revenue on a constant currency basis.
They also generated an operating cash flow of $34 billion, with shareholders receiving $25 billion during the quarter as Apple continues to invest in its long-term growth plans. The announcement noted that the company's board of directors declared a $0.23 cash dividend.
Related: Apple's iPhone 14 Pro, Pro Max Availability Remains Limited Due to Supply Constraints
