Apple’s quarterly revenues dip for first time in four years, forecast says another slump incoming

This is the first quarterly fall in revenue for the Cupertino, California-based company in nearly four years.

The tech giant seemed optimistic about iPhone sales as COVID-related restrictions in China have been eased off, improving production prospects for the company’s flagship product.

For the just-ended quarter, Apple’s profits missed Wall Street expectations for the first time since 2016, dragged down by iPhone sales falling for the first time since 2020.

Sales from each Apple product category dropped, except for gains in services and iPads.

Analysts had expected sales of $121.1 billion and profits of $1.94 per share, according to IBES data from Refinitiv.

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In an interview, Apple CEO Tim Cook told news agency Reuters that the production disruptions that plagued Apple’s key quarter were now over.”Production is now back where we want it to be,” he said.

During its fiscal first quarter ended Dec. 31, Apple faced a wave of challenges that left Wall Street expecting lower sales. Chief among those were supply chain pressures when COVID lockdowns at a production facility in Zhengzhou, China, slowed production of iPhone 14 Pro and Pro Max devices, both premium priced models that would traditionally help drive Apple’s margins higher.

Cook said the lockdowns in China created a dual challenge where both supply and demand were constrained, with greater China sales falling 7% to $23.9 billion.

Only two segments grew. The company’s services segment, which includes content businesses such as Apple TV+ and software business like the App Store, rose 6% to $20.8 billion in revenue. And sales of the iPad were up 30% to $9.4 billion, compared with analyst expectations of $7.8 billion, according to Refinitiv data.

Sales of the company’s Mac computers, which had boomed during the wave of working from home during the pandemic, declined 29% year over year to $7.7 billion. The wearables and accessories segment, which includes the Apple Watch and AirPods, fell 8% to $13.5 billion.

Despite the quarterly downturn in its sales, Apple hasn’t signalled any intention to lay off employees or cut its workforce, which is in contrast to its peers in the technology industry. Giants like Alphabet, Microsoft, Amazon and Meta Platoforms have announced plans to lay off more than a combined 50,000 employees.