Apple Dispels Chip Supply Shortages To Increase Sales

Despite limits caused by a global shortage of microchips, Apple sales rose over the crucial Christmas shopping season.

In the October to December period, sales at the iPhone behemoth increased by 11% to a record $123.9 billion, above expectations.

After-hours trading saw shares climb more than 4% as the news suggested the company’s pandemic boom would continue.

As individuals spend more time online during the pandemic, Apple has experienced a surge in sales.

The company’s market capitalization briefly surpassed $3 trillion in early January, but its share price has since fallen amid recent market volatility.

Last year, executives warned that a global shortage of microchips could limit the company’s sales, but in its quarterly statement to investors on Thursday, the company dismissed those fears.

Sales of Mac computers increased by 12 per cent, while iPhone sales increased by 9%.

With few competing phones launching during the holiday shopping season, Apple’s iPhone 13, which began selling days before the quarter began, resulted in $71.6 billion in worldwide phone sales revenue.

Apple’s services unit, which includes Apple Pay, the App Store, and its TV streaming service, saw a 23 per cent increase in revenue.

The iPad was the only product that exhibited signs of weakness, with sales dropping 14% due to supply concerns, according to executives.

The firm’s growth in the quarter was fueled by strong demand in China, where sales increased by 20 per cent.

Apple reported a 20 per cent increase in profits to $34.6 billion.

Despite shortages caused by the pandemic and, most recently, the Omicron version, the business, which has more than 1.8 billion active devices on the market, has been able to put pressure on suppliers and manufacturers to create large quantities of iPhones and other devices.

“They’ve navigated the supply chain better than everybody, and it’s showing in the results,” said Ryan Reith, who studies the smartphone market for industry tracker IDC.

Supply restrictions, according to Chief Financial Officer Luca Maestri, would lessen in the current quarter, which ends in March.

“The level of constraint will depend a lot on other companies, what will be the demand for chips from other companies and other industries. It’s difficult for us to predict, so we try to focus on the short term,” he said.

(Adapted from LiveMint.com) 

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