A recovery in iPhone demand and a continued strong services business have brought Apple strong profits. However, with a view to the upcoming Christmas season, the group is cautious.
Typically, the months before Christmas are among the busiest in Apple’s business. But the tech company doesn’t expect any big jumps this year. For the current quarter, sales are expected to be at the previous year’s level, he said. Apple thus disappointed the growth expectations of some investors. After all, the group expects further growth in the iPhone – its most important product.
Profit exceeds expectations
Investors nevertheless reacted soberly. Apple shares fell 3.6 percent in after-hours US trading. The US investment bank Goldman Sachs nevertheless raised the price target from 213 to 227 US dollars. The iPhone maker had a solid quarter, wrote analyst Michael Ng. Samik Chatterjee from JP Morgan made a similar statement: The technology group has once again proven the resilience of its product portfolio in a difficult environment.
In the fiscal quarter that ended at the end of September, quarterly sales fell by around one percent to $89.5 billion. However, at one percent the decline was lower than feared. The profit also surprised positively. Apple made almost $23 billion more profit than the previous year.
iPhone sales bring in more than half of the revenue
The recovery in iPhone demand particularly helped. After a slump in the previous quarter, sales of the revenue generator grew by 2.8 percent to $43.8 billion. Not only did the iPhone bring in almost half of the company’s revenue, it also later gave Apple the opportunity to sell subscriptions for more storage space or music streaming.
According to experts, the recovery will accelerate in the coming months as the smartphone market has bottomed out. Analyst Daniel Ives from asset manager Wedbush wrote that around 240 million iPhones worldwide are currently ready to be replaced by newer models. The new iPhone 15 went on sale in September, which will primarily play a role in the Christmas business.
At the same time, the services division, which includes the streaming service Apple+, consolidated its reputation as a growth driver. Here, revenue rose by 16 percent to $22.31 billion.
Difficult situation in China
Sales of Mac computers, on the other hand, fell by a good third to $7.6 billion. Apple pointed out that pent-up demand following previous production bottlenecks drove up sales in the same quarter last year. In addition, a new generation of the popular MacBook Air came onto the market at that time. Apple is now relying on new MacBook Pro models with more powerful chips to boost business.
Apple also missed analysts’ expectations with sales in the China segment, in which the group includes business in Taiwan and Hong Kong. Revenues there fell by 2.5 percent to around $15.1 billion. Recently, its competitor Huawei, which was hit hard by US sanctions, had success there again with a new smartphone. There is also the question of how the tensions between Beijing and Washington could affect the company’s business.