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Global Economy

Apple defies economic concerns

The US technology group Apple was able to increase its revenues in the past quarter despite fears of a recession and high inflation. Revenue rose 2 percent to $83 billion. Even stronger growth is possible in the next three months, said Apple CFO Luca Maestri when presenting the figures last night.

Earnings were above what analysts were expecting. Observers had assumed that consumers would be more reluctant to buy expensive Apple products.

Almost half of Apple's total revenue came from selling the iPhone. More than 1000 euros are due for the iPhone 13 Pro. In the third fiscal quarter ended June 25, iPhone revenue increased nearly three percent to nearly $40.7 billion.

Economic slump hits advertising revenue

Nevertheless, Apple is also burdened by the weak economic data: According to Maestri, the economic downturn is affecting advertising revenue and sales of accessories, which include Apple products such as headphones, AirTags and HomePod speakers.

Market watch Canalys analyst Runar Bjorhovde said: "Apple has a certain robustness that allows the company to be less stressed than its competitors." However, the smartphone leader Samsung Electronics is comparatively optimistic about the demand for cell phones in the second half of the year.

Mac sales fell

The group had bigger problems with the other products. Mac computers have long benefited from the trend towards hybrid work between the office and home office. Business recently collapsed here. Mac sales fell almost ten percent and were well below expectations.

In contrast, in the service business, which includes, for example, subscription revenue from Apple's music and video streaming offerings and app fees, there was significant growth from $17.5 to $19.6 billion. Apple's strategy of making more money from existing users of Apple devices worked. The group now has 860 million subscribers – that's 160 million more than a year ago.

Supply chain bottlenecks are decreasing

According to Maestri, the supply chain problems that have been serious for a long time are decreasing. However, they continued to play a role in Mac computers and iPads. In the past quarter, the group lost less than $4 billion in revenue as a result.

The bottom line is that the tech group's profits fell by 10.6 percent to $19.4 billion. Overall, Apple did better than the group itself expected, emphasized Apple boss Tim Cook. Apple believes in investing during periods of economic downturn, he said – and expressly did not rule out further company acquisitions.

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