By Reuters | Updated: 29 July 2022
Apple on Thursday said parts shortages are easing and that demand for iPhones is unceasing despite consumers tightening other spending, helping it top Wall Street expectations and forecast faster sales growth ahead.
The Silicon Valley giant’s shares rose 3.5 percent after hours following the release of the results.
Though macroeconomic indicators around the world are turning negative, Chief Financial Officer Luca Maestri told Reuters there had been no slowdown in demand for iPhones, the company’s biggest source of revenue.
Phone sales in the fiscal third quarter rose 3 percent to $40.7 billion (roughly Rs. 3,20,000 crore), when Wall Street had braced for a 3 percent decline. By contrast, the overall global smartphone market dropped 9 percent during the just-ended quarter, according to Canalys data.
Apple’s loyal and relatively affluent customer base has enabled it to weather consumer spending dips better than other brands in the past, and the company’s latest quarterly results suggest a similar pattern emerging.
Canalys Research analyst Runar Bjorhovde said, “Apple in that sense has a certain robustness that will allow it to be impacted less than a lot of its competitors.”
Apple offered some caution.
The slumping economy is hurting sales of advertising, accessories and home products, Apple’s Maestri said in an interview, calling the units “pockets of weakness.”
“Fortunately, we have a very broad portfolio, so we know we’re going to be able to navigate that,” he added.
The results show Apple’s advertising business, which includes selling ads alongside news articles and app store search results, is vulnerable to marketing cuts just the same as rivals Snap and Meta Platforms.
Parts shortages will continue to hamper Mac and iPad sales, Maestri said, though the impact has been easing. They cost Apple under $4 billion (roughly Rs. 31,800 crore) in sales in the quarter ended June 25, less than it had forecast. Maestri said the company expects the hit to diminish further in the current quarter.
But Apple risks joining rivals in amassing an unsellable stockpile of tablets and PCs if more customers than expected hold off purchases due to rising inflation and interest rates.
“In terms of testing the demand, you can’t really test the demand unless you have the supply,” Apple Chief Executive Tim Cook told analysts on Thursday. “And we were so far from that last quarter that we have an estimate of what we believe demand was. But it is an estimate.”
Citing the economic uncertainty, Apple said it was not providing specific revenue guidance. But it said sales compared to a year ago should rise faster in the current quarter than 2 percent growth it posted in the just-ended quarter.
Overall, Apple said quarterly sales and profit were $83 billion (roughly Rs. 6,60,000 crore) and $1.20 (roughly Rs. 90) per share, above estimates of $82.8 billion (roughly Rs. 65,70,000 crore) and $1.16 (roughly Rs. 90) per share, according to Refinitiv data.
The rising US dollar has hit many companies such as Apple that generate substantial foreign revenue and are getting less cash back when they convert it. Apple said currency fluctuations slashed sales by 3 percent in the June quarter and would crimp them by 6 percent in the current quarter.
Shuttering its business in Russia earlier this year due to the war also has hurt sales.
Apple, like many of its tech industry peers, is slowing hiring and cutting costs given the tough economic climate. Cook said Thursday that Apple was “being more deliberate in (hiring) in recognition of the realities of the environment.”
The most recent economic woes include supply chain disruptions that have hit production of some Apple products such as iPads and Macs whose assembly locations were clustered near regions of China that went into COVID lockdowns.
While sales of iPhones and iPads topped expectations, revenue from services, Mac computers and accessories missed Wall Street targets and sales in the crucial China market fell 1 percent as consumers being on lockdown there limited sales.
Apple also is confronting slow overall economic growth in China, where its fiscal third-quarter sales were $14.6 billion (roughly Rs. 1,20,000 crore).
Growth in the company’s services business, which has provided a boost to sales and profits in recent years, was 12 percent, below the previous year’s 33 percent rate and resulting in $19.6 billion (roughly Rs. 1,50,000 crore) in revenue, below estimates of $19.7 billion (roughly Rs. 1,50,000 crore).
Apple said it now has 860 million paying subscribers to its services, up from the previous quarter’s 825 million.
Sales of iPads and Macs were $7.2 billion (roughly Rs. 57,000 crore) and $7.4 billion (roughly Rs. 58,000 crore), compared with estimates of $6.9 billion (roughly Rs. 54,000 crore) and $8.7 billion (roughly Rs. 70,000 crore). Mac sales represented a 10 percent contraction, after record sales since 2020, first from a work-from-home boost and then from Apple’s new proprietary processor chips.
Its shares closed Thursday down about 11 percent so far this year, slightly less than the broader S&P 500 index and also less than other consumer hardware makers such as Sonos and Samsung Electronics, the only company that sells more smartphones than Apple.
NavIC Rollout: No Timeline Fixed For Implementing Indigenous GPS Alternative, MeitY Says
By ANI | Updated: 27 September 2022
The central government has said that it has held a meeting with mobile manufacturers to discuss the compatibility of the home-grown global positioning system — NavIC — in smartphones, but no timeline was fixed for its implementation.
This clarification by the government came on Monday after media reports suggested India was looking to mandate its indigenous navigation system “within months”.
The Ministry of Electronics and Information Technology (MeitY) said the meeting was “consultative”.
“A media report has claimed citing a meeting that mobile cos were asked to make smartphones compatible with NavIC within months. This is to clarify: (1) No timeline has been fixed. (2) The cited meeting was consultative; and (3) the issue is under discussion with all stakeholders,” the Ministry of Electronics and IT said in a tweet late on Monday night.
A media report has claimed citing a meeting that mobile cos were asked to make smartphones compatible with NavIC within months. This is to clarify: (1) No timeline has been fixed. (2) The cited meeting was consultative; and (3) the issue is under discussion with all stakeholders.— Ministry of Electronics & IT (@GoI_MeitY) September 26, 2022
What is NavIC? How is it different from its previous version IRNSS?
NavIC (Navigation with Indian Constellation) is the name of the independent stand-alone navigation satellite system of India.
This system was earlier known as IRNSS (Indian Regional Navigation Satellite System).
The name NavIC was coined by the Prime Minister of India on the occasion of the completion of the constellation in April 2016.
Which are the navigation satellite systems operational currently in the world?
Presently, there are four global systems, GPS from the US, GLONASS from Russia, Galileo from European Union and BeiDou from China.
In addition, there are two regional systems, NavIC from India and QZSS from Japan.
What is the need for NavIC when already GPS, GLONASS, Galileo and BeiDou are operating?
GPS and GLONASS are operated by defence agencies of the respective nations. It is possible that the civilian service can be degraded or denied.
NavIC is an independent regional system over the Indian region and does not depend on other systems for providing position service within the service region.
It is fully under the control of the Government of India.
Apple to hike App Store prices in several countries from Oct
By: Reuters, Updated September 20, 2022
Apple Inc said on Monday prices of apps and in-app purchases on its App Store will increase in several countries including Japan, Malaysia and all territories that use the euro currency, from next month.
The new prices, excluding auto-renewable subscriptions, will be effective as early as Oct. 5, Apple said in a blog post.
These changes will also reflect new regulations for Apple in Vietnam to collect and remit applicable taxes, being value added tax (VAT) and corporate income tax (CIT) at 5% rates respectively, the company added.
Apple plans to use latest chip tech by Taiwan’s TSMC in iPhones, Macs – Nikkei
By: Reuters, September 14, 2022
Sept 14 (Reuters) – Apple Inc is planning to use an updated version of Taiwanese chipmaker TSMC’s (2330.TW) latest chip producing technology in iPhones and Macbooks next year, the Nikkei Asia newspaper reported on Wednesday.
The A17 mobile processor, which is currently under development, will be mass-produced using TSMC’s N3E chipmaking tech, expected to be available in the second half of next year, the report said, citing people familiar with the matter.
The A17 will be used in the premium entry in the iPhone lineup slated for release in 2023, it added.
Apple declined to comment, while TSMC did not immediately respond to Reuters request for a comment.
The current iPhone model has an A15 processor chip and in the recent Apple launch event, the company said iPhone 14 Pro models will also have the same.
The chipmaker controls about 54% of the global market for contractually produced chips, supplying firms including Apple and Qualcomm Inc.
New Apple iPhone will be available in Russia, trade minister says
By: Reuters, September 8, 2022
Sept 8 (Reuters) – Russians will have the chance to buy the new Apple iPhone 14 despite the U.S. tech company having left the country thanks to Moscow’s parallel import scheme, a senior government official told the RIA Novosti news agency on Thursday.
Russia announced the scheme in March when it authorised retailers to import products from abroad without the trademark owner’s permission. read more
Asked whether the new iPhone, unveiled by Apple on Wednesday, would be imported under the scheme, Trade and Industry Minister Denis Manturov said: “Why not? If consumers want to buy these phones, yes. There will be the opportunity.”
Apple halted new product sales in Russia in March, a week after Russia invaded Ukraine, though the iPhone, MacBook and other Apple goods have remained available in Russian stores as retailers sell down their remaining stock of old models and get hold of newly released devices through the import scheme.
Russian mobile network MTS on Thursday morning was already selling the new iPhone 14 models on pre-order. Prices start from 84,990 roubles ($1,398) for the 128GB version.
MTS said delivery could take up to 120 days and it retained the right to cancel orders if it faced difficulties importing the products.
Apple did not immediately respond to a request to comment.
Manturov, who is also a deputy prime minister, said last month that the scheme, which covers Western products ranging from luxury clothes to cars, could reach $16 billion in value this year, equivalent to around 4% of Russia’s 2021 imports.
Apple to appeal Brazil sales ban of iPhone without charger
By: Reuters, September 7, 2022
SAO PAULO, Sept 6 (Reuters) – Apple Inc said on Tuesday it will appeal a Brazilian order banning it from selling iPhones without a battery charger, pushing back on claims that the company provides an incomplete product to consumers.
The Justice Ministry fined Apple 12.275 million reais ($2.38 million) and ordered the company to cancel sales of the iPhone 12 and newer models, in addition to suspending the sale of any iPhone model that does not come with a charger.
In the order, published on Tuesday in the country’s official gazette, the ministry argued that the iPhone was lacking a essential component in a “deliberate discriminatory practice against consumers.”
The authorities rejected Apple’s argument that the practice had the purpose of reducing carbon emissions, saying there is no evidence that selling the smartphone without a charger offers environmental protections.
Apple said it would continue to work with Brazilian consumer protection agency Senacon in order to “resolve their concerns,” while saying it would appeal the decision.
“We have already won several court rulings in Brazil on this matter and we are confident that our customers are aware of the various options for charging and connecting their devices,” Apple said.
The order comes a day before Apple is expected to announce its new iPhone model.
India considers restricting sale of sub-$150 phones by Chinese firms, Bloomberg reports
By reuters | Updated: 29 August 2022
NEW DELHI, Aug 8 (Reuters) – India is seeking to restrict Chinese companies from its sub-$150 phone market in a bid to revive the prospects of domestic players, Bloomberg News reported on Monday, citing unidentified sources.
The move would be a blow to Chinese companies such as Xiaomi , according to the report. The plans coincide with rising concerns in India about Chinese brands undercutting local smartphone makers, it added.
It is unclear if the Indian government will announce policies or use informal channels to execute the block on Chinese smartphone makers, Bloomberg said, citing people familiar with the matter.
Chinese firms account for a major chunk of entry-level smartphones that are popular among users shifting away from traditional devices in India, which is the second largest mobile market in the world.
Indian firms such as Lava and MicroMax rapidly gained popularity after their launch over a decade ago, but have since lost market share to stiff competition from Chinese players.
Many Chinese companies have struggled to do business in India due to political tensions following a border clash in 2020. India cited security concerns in banning more than 300 Chinese apps, and has also tightened rules for Chinese companies investing in India.
Xiaomi and rival Vivo are being investigated by India’s financial crime fighting agency for alleged illegal remittances and money laundering. Both deny any wrongdoing.
The companies and the Indian government did not immediately respond to requests for comment on the report.
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