Apple’s quarterly revenue hits record high but growth in multiple markets stalled

Our reporter Chen Jialan reported from Guangzhou

On October 27, Apple released its fourth quarter results for fiscal 2022, which ended on September 24. According to the financial report, Apple’s fourth-quarter revenue was US$90.146 billion, an increase of 8.1% year-on-year, higher than market expectations of US$88.9 billion, setting a record for the July-September quarter; net profit was US$20.71 billion, a year-on-year increase of 0.83% . Compared to other Silicon Valley tech giants, Apple’s performance can be said to be relatively stable.

Although Apple’s quarterly revenue and profit exceeded market expectations, or due to the weaker-than-expected performance of its iPhone and services businesses, the company’s shares fell on the U.S. stock market on the day. However, on October 28 the next day, the stock price turned higher and opened up 7.56%.

Apple CEO Tim Cook said on a post-earnings conference call that if it weren’t for a stronger dollar, Apple would have posted double-digit revenue growth in the quarter. In addition, the limited supply of the high-end iPhone 14 Pro has affected sales to a certain extent. He also said that Apple has deliberately slowed hiring, in line with what other tech giants in Silicon Valley are doing now.

“Apple’s overall earnings performance in the quarter was good, but the overall market downturn still had a certain impact on Apple.” Guo Tianxiang, senior analyst at IDC China, said in an interview with a reporter from “China Business News” that due to the poor macroeconomic conditions, although the Apple was the only player to post positive profit growth this quarter, but it still faces challenges as its growth is hampered in many markets, including China.

iPhone still maintains positive growth

In terms of segmented businesses, the iPhone is still Apple’s mainstay of revenue. The iPhone’s sales in the quarter were US$42.6 billion, a year-on-year increase of 9.7%, but it was lower than analysts’ expectations of US$43 billion; iPad revenue was US$7.17 billion. It was lower than the expected $7.94 billion, down 13.06% year-on-year; Mac revenue was $11.51 billion, significantly better than the expected $9.36 billion, up 25.39% year-on-year, and it was also one of the few bright spots in this financial report.

In terms of sub-regional markets, Apple’s revenue in Greater China was US$15.5 billion, an increase of 6% over the same period last year, higher than analysts’ expectations of US$15.1 billion.

Apple CFO Luca Maestri said iPhone sales hit a record in September. On September 8 this year, Apple released the iPhone 14 series of smartphones.

At the same time, the data of the consulting agency can also prove that under the contrarian trend, the performance of the iPhone in the quarter is still remarkable.

According to IDC data, in the third quarter of 2022, among the top five smartphone manufacturers in the world, Apple ranked second with 51.9 million units shipped and a 17.2% market share, with shipments increasing by 1.6% year-on-year. Among the top five smartphone manufacturers in the world, in addition to Apple’s positive year-on-year growth rate in the quarter, Samsung, Xiaomi, vivo, and OPPO all experienced a decline in growth rate. At the same time, the top five manufacturers in the Chinese smartphone market in the quarter Among them, Apple is also the only manufacturer to achieve positive growth.

“Due to the obvious product differentiation of this year’s iPhone 14, the lower-than-expected sales of the regular version also indirectly made the higher-priced 14 Pro version better than previous years’ Pro versions, driving the revenue of iPhone products. Growth.” Guo Tianxiang told reporters that the sales of the iPhone 14 series may not be as good as the sales of the iPhone 13 in the same period last year, but because of the difference in pricing, the Pro version still helped Apple gain higher revenue.

Canalys analyst Liu Yixuan also believes that the strong demand for the iPhone 14 Pro series has contributed to Apple’s shipment performance, but the lackluster demand for the iPhone 14 basic version shows that even Apple cannot completely escape the weakening consumer demand in the Chinese mainland market. Under the strong competition from Android manufacturers, Apple has to adopt aggressive promotion policies in its entry-level versions and previous models, especially in the price range of 5,000-6,000 yuan.

No. 1 in the domestic market is still a Chinese brand

In the third quarter of this year, Apple’s iPhone 14 was released earlier than in previous years, and at the same time, Huawei’s Mate50 new product returned. The two strong rivalries have attracted attention, or may also have some effects on the domestic market. Judging from the data of the third quarter 2022 smartphone market report in mainland China released by IDC and Canalys, among the top five brands in the market, Apple is the only manufacturer with growth, and vivo, OPPO, Honor, and Xiaomi all experienced year-on-year declines. From the perspective of the top six in the market, Huawei’s domestic market shipments also increased year-on-year in the quarter. In addition, the gap in shipments among the top manufacturers is also narrowing, and the competition among the top six manufacturers in the Chinese market is fierce. more sticky.

With the overall demand weakening, domestic mobile phone manufacturers are seeking breakthroughs in the high-end market. “vivo continues to improve imaging capabilities on the flagship X series, and OPPO is investing in the construction of a cross-terminal ecosystem. In order to achieve sustainable growth in the high-end price segment, profitability is a key factor for manufacturers, both in product planning and channel operations. The most important measure.” Canalys analyst Zhu Jiatao pointed out that, at the same time, for leading manufacturers, when planning new products for high-end user groups, successful product definition needs to avoid vicious competition in specification configuration. Huawei is still in the market and is always ready to return. For manufacturers committed to investing in high-end, Huawei is still their biggest threat. In addition to the top five manufacturers, Huawei has once again achieved growth with the Mate series that only supports 4G, showing that the channel and consumer demand for Huawei’s retention cannot be underestimated.

“Huawei’s terminal base is already small after the restrictions, but after the launch of new products in the second half of this year, the market share is rising, and it still maintains a relatively strong competitiveness. Mate 50 has a certain market impact on Apple’s high-end market, but it cannot be said that Huawei It is the return of the king, it is still difficult for the Mate 50 to catch up with the shipments of previous generations of products, and it will still take more time for Huawei to recover.” Guo Tianxiang told reporters that competition among leading manufacturers in the future will not be possible without the In the case of interference from external factors, it depends on which manufacturer has advantages in terms of products and strategies, and is expected to gain the upper hand in the competition.

However, at present, the Chinese market is still dominated by domestic brands. According to Canalys, vivo still ranks first in the domestic smartphone market with sales of 14.1 million units; OPPO (including OnePlus) shipped 12.1 million units, ranking up to the second. Both vivo and OPPO achieved quarter-on-quarter growth after optimizing their inventory levels in the first half of the year.

According to IDC data, vivo returned to the first place in the domestic market in terms of shipments in the third quarter, with a market share of 20.0%. The sub-brand iQOO has been continuously recognized by the market with its good product strength and competitive price positioning, and its market share has continued to increase, accounting for 4.6% of the domestic market in the third quarter. The vivo X series continued the excellent performance of the previous quarter and maintained its leadership in the mid-to-high-end market of US$400~600 (excluding tax benchmark).

It is worth noting that due to the slowdown in economic growth and the decline in consumption power, the downward trend of the domestic smartphone market has improved compared with the previous two quarters. IDC data shows that the decline in the domestic smartphone market has narrowed from a year-on-year decline of 14.1% and 14.8% in the first and second quarters of 2022 to a year-on-year decline of 11.9% in the third quarter.

(Editor: Wu Qing proofreading: Yan Yuxia)