Apple Sales Show Large Quarterly Fall

Apple, the world’s most valuable brand, missed expectations for revenue and profit for the holiday quarter. Overall sales were about 5% lower than the year before, the first year-on-year sales decline since 2019.  

Explaining the results, CEO Tim Cook attributed the decline to three well-known factors: the strong US dollar, production issues in China, and the weak macroeconomic environment. 

Apple shares dropped over 4% at one point soon after the company’s earnings were made public. The company gave investors some comfort by saying its outlook for the current quarter suggested sales would not fall as rapidly as in the last quarter.

This was the first serious earnings miss, when compared to market expectations, in seven years. Analysts point out that the company cannot repeat its pandemic era success, which was marked by a rush for new devices as customers worked and studied from home.

The role of the strong dollar cannot be discounted. CEO Tim Cook noted the company grew by unit sales in many overseas markets, but collected 8% less in dollar revenues than it would have if the US dollar had been trading at 2021 levels.   

The report was not all doom and gloom. The company revealed it has two billion active devices around the world, including iPhones, Macs, Apple Watches and other products. This is a jump from the 1.8 billion devices that were active in January last year.  

This is significant because the company’s global reach means it has a better chance of monetizing cloud-based services like Apple Pay, Apple Card and Apple Music.