News Global smartphone sales growth slows, Apple to report first-quarter earnings

idman24February 2, 2023

13 2 minutes read

Apple (AAPL) is due to report its first-quarter earnings on Feb. 2 after the market closes, with investors and analysts hoping to see how much China’s COVID lockdown is affecting iPhone sales during the holiday season.

Here’s what analysts are expecting for the company, compiled by Bloomberg, and compared to Apple’s performance in the year-ago period.

income: $121.1 billion expected, compared to $123.9 billion in Q1 2022
Adjustment. EPS: Expected $1.94 vs. $2.10 in Q1 2022
iPhone revenue: Projected $68.3 billion vs. $71.6 billion in Q1 2022
Mac income: $9.72 billion expected, compared to $10.8 billion in Q1 2022
iPad revenue: $7.7 billion expected, compared to $7.2 billion in Q1 2022
Wearable device: $15.3 billion expected, compared to $14.7 billion in Q1 2022
Serve: $20.4 billion expected, compared to $19.5 billion in Q1 2022

Apple has outperformed its big tech peers over the past 12 months, with shares down just 16% as of Wednesday afternoon, compared with an 18% drop for Microsoft (MSFT) and a 25% drop for Google parent Alphabet (GOOG, GOOGL ). But it’s not without its own problems.

Throughout November and December, Apple faced significant headwinds from COVID lockdowns and worker protests at manufacturer Foxconn’s factory in Zhengzhou, China. The factory, which employs 200,000 people, makes most of Apple’s iPhone 14 Pro and iPhone 14 Pro Max phones.

Starting at $999 and $1,099, respectively, the iPhone 14 Pro and iPhone 14 Pro Max are two of Apple’s most important devices. Their higher prices help drive up the average selling price of iPhones, which in turn leads to higher revenue for the tech giant.

According to IDC’s Worldwide Quarterly Mobile Phone Tracker, Apple’s iPhone shipments fell 14.9% year-over-year, from 85 million units in the fourth quarter of 2021 to 72.3 million in the fourth quarter of 2022.

Apple CEO Tim Cook. (AP Photo/Jeff Chiu)

It’s not just the iPhone that’s in trouble, though. On Apple’s fourth-quarter earnings call, Apple CFO Luca Maestri said that Apple expects foreign exchange headwinds to have a negative impact of nearly 10 percentage points year-over-year.

What’s more, he said he expects Mac revenue to “decline significantly year-over-year. Services revenue, meanwhile, is expected to grow but also faces foreign exchange headwinds.

Apple could also face a difficult second quarter, according to UBS analyst David Vogt.

“While we think the market is sufficiently cautious about the December quarter results, we see modest downside risks to the March outlook,” he wrote in a recent investor note. Resuming typical Apple earnings detailed guidance, but we expect commentary to be cautious on broad product demand.”

While sales may be slowing, Apple has managed to avoid mass layoffs, unlike peers such as Microsoft, Google and Amazon (AMZN ).

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