Apple reigns supreme, and the chill is coming

Written by Sun Xiaowei

Editor | Yang Bocheng

Title image | IC Photo

On October 27, local time, Apple announced its fourth-quarter earnings report that ended on September 24. During the performance period, Apple’s operating income was US$90.1 billion, a year-on-year increase of 8.1%; net profit was US$20.721 billion, a year-on-year increase of 0.83%.

Apple’s fiscal fourth quarter was close to JPMorgan analysts’ forecast of $90 billion in revenue and higher than Wall Street’s forecast of $88.6 billion for the quarter. Therefore, Apple’s fourth-quarter results are basically considered to be higher than the overall market expectations, but due to the overall market change and the performance of the stock market on the day, Apple’s stock rebounded slightly after the day’s decline, and it still fell 3.05% by the end of the session.

Although the release of Apple’s financial report shows the market its strong market revenue capability as a global technology leader, in the context of the collective cold of the global technology market, if Apple wants to continue to rise against the market in the next fiscal quarter, it can be said that in the face of it is difficult.

1. The iPhone 14 has become the pillar of performance, and the supply chain has become the key to performance

According to the financial report, Apple’s iPhone business revenue in the fourth quarter was 42.6 billion US dollars, a year-on-year increase of 9.7%, which was basically in line with the forecast of market institutions. However, considering that the sales of new products this season are only 9 days, and its performance boosting effect has not been fully released, it is not easy to achieve the above performance.

According to the latest data released by analyst firm Canalys, weak demand in the third quarter of 2022 caused global smartphone shipments to fall by 9% year-on-year to 298 million units. Samsung defended its No. 1 position in the market, but was still down 8%, with shipments of 64.1 million units. Apple is the only manufacturer to achieve growth, with an increase of 8% year-on-year and shipments of 53 million units.

However, it should be noted that even if the positive growth in shipments is maintained, some institutions have already adjusted their expectations for the production of Apple mobile phones, reducing it by 14% from the original 56 million units to 52 million units.

Therefore, to interpret the hot demand for Apple’s new machine from this perspective, on the one hand, it is indeed because of the excellent product strength, and on the other hand, it also shows that Apple’s new machine is encountering a production capacity supply dilemma. On this point, in the earlier Apple performance communication meeting, Cook revealed that the limited supply of high-end mobile phone iPhone 14 Pro has affected certain sales.

However, it is a foregone conclusion that Apple’s mobile phones continue to be popular in the market. According to data from analysis agency Canalys, Apple’s mobile phone market share has increased from 15% to 18%, which is the manufacturer with the largest share increase. At the same time, Apple’s mobile phone has reached more than 800 US dollars. It ensures the strong revenue capability of its mobile phone business. According to the observation and prediction of industry analysts, the sales of Apple Pro models will account for 60% of the iPhone 14 series, exceeding the proportion of sales of previous high-end models.

In other words, relying on the performance boost of the new phone, Apple’s mobile phone revenue may reflect beautiful figures in this quarter and the next quarter.

Second, consumer electronics, two happy and one sad

Different from the explosion of the mobile phone business, the revenue of other consumer electronics products can be said to have their own hidden concerns.

According to the financial report, Apple’s Mac business revenue in the fourth quarter was 11.5 billion US dollars, a year-on-year increase of 25.4%. According to the analysis of the reasons for the sharp recovery of the Mac business, on the one hand, the supply-side problems affected by factors such as the epidemic in the second quarter have been resolved, and on the other hand, the product value reflected by Apple’s new MAC products equipped with self-developed chips has been recognized by consumer groups.

However, for Apple, the worry is not in the product itself. According to data released by analyst firm Counterpoint Research on October 27, in the third quarter of 2022, global PC shipments fell by 15.5% year-on-year to 71.1 million units, which is another wave after the severe annual decline in the second quarter. Huge year-over-year decline. The shrinking market demand has seriously affected the entire PC industry chain. It is reported that many technology giants, including Apple, are looking for channels to cut expenses, including freezing recruitment, reducing funds and even layoffs.

The MAC business has achieved gratifying performance in the cold winter of the industry, while the iPad business has not had such good luck. In response to the severe shrinking demand for online entertainment and learning, Apple’s iPad business revenue in the fourth quarter was US$7.17 billion, a year-on-year decrease of 13.06%.

This is reminiscent of the year-on-year decline in revenue from iPads and Macs in the last fiscal quarter. Cook explained that the main reasons for this situation were supply constraints and the strengthening of the U.S. dollar, and pinned his hopes on Peak sales season after September. However, in this fiscal quarter, when the MAC business came out of the quagmire and the iPad still did not improve, the objective impact of the industrial environment has obviously affected the iPad with stronger entertainment attributes, younger customer positioning and overlapping functions with MAC. product.

In contrast, in the fourth quarter, wearables, home products and accessories revenue was $9.65 billion, an increase of 9.8% year-over-year, and the results are still gratifying. The reason is that the stability of the general environment and the promotion of new products have become the main factors for the performance to pass.

Taking smartwatches as an example, in Apple’s second fiscal quarter, according to the analysis by Canalys, the global shipments of wearable wristband devices increased by 2.0% to 41.7 million units, returning to growth after a 3.7% decline in the first quarter. Among them, the growth rate of smart watches reached 9.3%. Apple ranked first in the global smartwatch market with a 26% market share, with shipments up 6% year-on-year to 8.4 million units, more than twice as much as second-placed Samsung.

Obviously, Apple’s wearable products represented by products such as Apple Watch and AirPods are more portable and fashionable than other consumer electronic products, and have a more rhythmic cycle in product updates, which can cover the consumer population relative to the personal computer business. To put it more broadly, it is also reasonable to record relatively excellent financial results.

Therefore, in the case of different market structures, the three major businesses of Apple’s consumer electronics sector present a scene of two happy and one sad.

3. The growth of service revenue is weak, and the new measures are ugly and questioned by monopoly

As another major revenue pillar for Apple, software services revenue in the fourth quarter of fiscal 2022 was $19.2 billion, an increase of 5% year-on-year.

After the data was released, the market reaction was huge. This is the first time that Apple’s service growth curve has fallen again after the decline in revenue last quarter. The 5% growth rate was not only lower than market expectations, but also fell into single digits for the first time.

In fact, in the face of the sharp decline in growth rate, Apple’s service self-help has continued from last quarter to this quarter. In August, Bloomberg reported that Apple is expected to change the rules of advertising, and plans to expand advertising to more areas such as iPhone and iPad. In October, Apple officially sent a notification email to iOS third-party developers, indicating that the software will be displayed on the “Today” tab of the Apple App Store and the “You may also like” section at the bottom of each software page window. related ads.

The move marks the first time Apple has allowed third parties to freely place ads in an open stance. Of course, the price third-party service providers need to pay is the price hike for Apple Music and Apple TV+ services. Among them, the price of Apple Music service increased from $9.99 to $10.99 per month, while Apple TV+ increased from $4.99 to $6.99.

This is reminiscent of the ATT Privacy Policy (APP Tracking Transparency Privacy Policy) launched by Apple last year. Under the ATT framework, service providers need to ask users for permission before they can track users or access their device’s advertising identifier (i.e. IDFA). According to industry analysis, this policy sets and controls third-party applications from the traffic portal, which makes third parties lose the opportunity to actively analyze customer product preferences, and for third parties, loses the data on the optimization of advertising effects in the iOS ecosystem. Without the foundation, the key link of accurate advertising will be lost, and the technical soil of advertising revenue will be lost.

Tightening last year and opening this year, Apple’s pursuit of wider advertising revenue channels and higher service prices in the cold winter of the industry are all efforts to generate revenue, but the premise is that Apple’s ecosystem is still under Apple’s control, but This premise is also being loosened.

After the announcement of the new advertisement placement notice, it caused widespread controversy in the industry. Some analysts believe that when third parties do not have enough willingness to pay to add advertisements, they still have to pay out of their own pockets in the face of possible occupied advertising spaces and loss of users. Again, this implicit forced purchase has sparked renewed discussions about Apple’s monopoly.

In fact, “crimes” such as the “30% Apple tax” in the industry’s mouth for a long time have not been friendly to third-party small service providers, and the practice of controlling data flow has “made the world suffer for apples for a long time.”

In view of the negative impression accumulated by Apple’s services, fierce resistance against Apple’s monopoly has erupted in various regions since the beginning of this year: At the beginning of the year, India launched a large-scale anti-monopoly investigation against Apple. On March 30, according to relevant media reports, Apple faced a class action lawsuit in the Netherlands, and the company’s App Store was accused of abusing the monopoly of 30% commission. Subsequently, Russia, Brazil, South Korea and other countries also conducted targeted investigations on Apple services.

A more thorough approach to Apple services is the European Union. According to a written statement previously issued by the European Commission to Apple, Apple has been restricting users from using other payment systems on Apple devices in recent years, citing the protection of user security and privacy, adding that Apple’s anti-competitive behavior can Back at least as far back as 2015. If this accusation is established, Apple will face a fine of up to 10% of its global annual turnover, which is estimated to be about 36.6 billion US dollars (about 241.864 billion yuan) according to the turnover data of the previous fiscal year.

In early July, the EU formally passed the Digital Markets Act (DMA) and the Digital Services Act (DSA). The bills include: requiring large technology companies to “allow users to install applications from third-party application stores and directly from the Internet. “Side download” and “Allow developers to provide third-party payment systems in the application” and so on. The passage of this bill is considered to fundamentally limit the possibility of technology giants such as Apple continuing to implement monopoly terms.

All of the above are internal and external problems that Apple’s service business has to face. If you want to increase revenue, the expansion of advertising channels and the opening of technical levels alone may not be able to save the falling technology giant.


1. “iPhone 14 Pro is hard to stop Apple’s whereabouts”, alphabetical list

2. “Organization: Q2 global wearable wristband device shipments increased by 2% to 41.7 million units”, Aijiwei

3. “Heavy! Apple is on a roll again! Or face a huge fine of 240 billion yuan”, China Times