Status: 07/19/2022 10:06 a.m
According to a media report, the iPhone manufacturer Apple wants to reduce its costs in order to prepare for a possible recession. The news creates bad mood in the tech sector and on the stock market.
The US technology group Apple apparently wants to react to an expected downturn in the global economy and lower demand for its products with savings. This was reported by the Bloomberg news agency last night, citing insiders.
Although Apple did not confirm the report and initially did not comment on it, the US stock exchanges on Wall Street slipped significantly in late trading in the evening. Technology stocks lost above average, Apple papers lost around two percent.
Hiring freeze and investment brake
According to the report, Apple intends to put the brakes on costs in certain areas in the coming year. The US company plans to slow hiring and slow spending growth in some business areas in 2023 in anticipation of a possible economic downturn, according to Bloomberg.
A hiring freeze is to be imposed in the affected areas, although Apple usually increases its workforce there by five to ten percent annually. Vacancies should not be filled there. In recent years, the company has aggressively expanded its workforce and invested heavily in research and development.
This spring, however, the company had warned of delivery problems due to the closure of some production facilities in China, which would have cost Apple around eight billion dollars in revenue in the first quarter of the current fiscal year alone.
Product offensive continues
According to the report, Apple is sticking to an ambitious roadmap for introducing new products. Four new iPhone models are to be presented this year. There are also new versions of the Apple Watch and Mac computers.
For observers, the possible preparations for a global downturn are another indication that high-tech companies in particular are becoming more cautious with their spending. Before Apple, the Facebook parent company Meta, the electric car maker Tesla and some US banks had already slowed down new hires in order to arm themselves against a slowdown in the economy.
Top dogs dominate the smartphone market
The measures at Apple follow an already existing sales weakness in the company’s most important market, smartphones. According to the market research company Canalys, sales of smartphones in the second quarter fell by nine percent to less than 300 million devices. According to the analysis company, however, the two largest smartphone providers Samsung and Apple have expanded their market shares in the overall shrunken business.
Samsung’s market share increased from 18 to 21 percent year-on-year in the second quarter. The market share of Apple’s iPhones increased from 14 to 17 percent. According to Canalys, the losers in the current development are the Chinese manufacturers Xiaomi, Oppo and Vivo due to weaker demand in China.