Many people are worried about the sales of Apple’s iPhone 14. this is why

Many people are worried about the sales of Apple’s iPhone 14.  this is why

When you think of Apple, you probably think of the iPhone. Or maybe he Mac or the old ipod music player. When you think of Apple’s bank account, bursting into over $179 billion in cash and marketable securities, you probably imagine a pile of money bigger than anything you’ve ever seen in a cartoon. This week, Apple is also likely to take on a new role, as a proxy for our shaky economy.

The California tech giant is to release a financial report for its fiscal fourth quarter on Thursday, revealing details about its revenue and profit between July and September. They are not the months that cover the important Christmas shopping season, during which Apple usually records more sales than the total economic output of many countries. But it will include a couple of weeks of sales for its newly released iPhone 14newer apple watches and updated AirPods Pro also.

The report may also serve as a sign of health for the global economy. Polls show that many people are increasingly convinced that the world has entered a painful recession that can last a long time. Meanwhile, lawmakers and business leaders are scrambling to combat persistent inflation, now above 8%in the middle of russia ongoing war in Ukrainewhich has helped cause artificially higher energy prices.

The technology industry, once a bright spot in the economy, is beginning to feel the pressure. Published Google Main Alphabet Weaker-than-expected third-quarter earnings on Tuesday, fueled in part by issues such as exchange rates and reduced spending by advertisers. The father of Facebook, Meta, did not meet the expectations of Wall Street on Wednesday and gave a forecast sales and expenses which spooked investors so much that the company’s shares plunged more than 22% the next day.

Hardware manufacturers may not fare any better. Worldwide smartphone shipments are expected to fall more than 6% this year, to to 1.27 billion units, due to what market researcher IDC described as “record inflation, geopolitical tensions, and other macroeconomic challenges that have significantly reduced consumer demand.” Meanwhile, Microsoft warned on Tuesday that sales of its Windows software to power PCs would likely drop more than 30% during the holidays.

Coins on a table marked with mathematical formulas

The unstable world economy could mean weak Christmas shopping.

Sarah Tew/CNET

Analysts on average, however, seem convinced that Apple can buck that trend. The company is expected to report $1.27 per share in earnings, 2% more than in the same period a year ago, according to an average of analysts. surveys published by Yahoo Finance. That would translate to $88.9 billion in sales, up almost 7% from a year ago.

Even then, analysts warn, the quirks of the financial calendar mix with Worrying trends in early Christmas shoppingraises more questions than answers.

“We are concerned that Apple may have been a beneficiary of Covid, amid work/learn from home and strong consumer spending, that it could reverse, particularly as consumer spending priorities change,” the analyst wrote. of Bernstein Research, Toni Sacconaghi, in a message to investors last week.

The key, he said, is what Apple will say about its iPhone 14 sales so far. “Investors should expect Apple to be bullish on the iPhone 14, but it may or may not necessarily reflect the success of the end of the cycle.”

An Apple spokesman did not respond to a request for comment ahead of the company’s earnings.

Tim Cook at Apple's iPhone 14 event

Analysts will be listening closely to what Apple CEO Tim Cook (right) has to say about how demand for the iPhone is shaping up.

James Martin/CNET

All about the iPhone

Investors and industry watchers always seem nervous about Apple’s iPhone sales. After all, that unique line of products it accounted for more than half of the company’s $365 billion in sales last year. It’s no surprise, then, that industry observers obsessively follow any possible signs of how it’s selling.

In any given week, there seems to be new news of increased or decreased demand, and change of manufacturing plans in response. This time, rumors suggest that More expensive iPhone 14 ProStarting at $999 in the US, it’s better than its cheaper cousins, the $829 iPhone 14 Y $929 iPhone 14 Plus.

“We continue to expect strong results for the iPhone despite concerns about iPhone production cuts,” Evercore ISI analyst Amit Daryanani wrote in a note Monday, adding that his team’s research and surveys indicate a strong demand.

Part of why some industry watchers are more bullish on Apple is that, as analysts at Cowen Equity Research said, more expensive “premium” smartphones haven’t seen demand drop as much as cheaper products.

Although Apple may end up being a benchmark in the ongoing debate over the health of the global economy, Morgan Stanley analysts said they don’t expect much of anything Apple says Thursday that will “assuage” any concerns about the downturn. of spending among consumers.

Apple executives will answer analyst questions about a publicly broadcast conference call shortly after publishing the company’s earnings on Thursday afternoon.

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