Although Apple’s first-quarter revenue was able to beat analysts’ estimates, CEO Tim Cook warned that Apple is seeing some negative trends in the middle of the current quarter, which could cut $4-8 billion in revenue.
The main factors that will contribute to falling behind Apple financially this quarter were the closures of enterprises due to COVID-19 in China. Among them are many companies that assemble Apple products. Also mentioned is the loss of the Russian market, the rising inflation rate, which leaves buyers with less money, as well as the general shortage of components that has long plagued the industry.
Apple analyst Chris Kaso of Raymond James believes that the company will be forced to raise prices for the iPhone 14 outside the US in response to the depreciation of national currencies in different countries.
We think that September will be good, assuming that the situation in China returns to normal. However, Apple will have to raise prices in local currencies when the new iPhones hit the market if exchange rates haven’t changed by then. When this has happened in the past, rising local prices have had a negative impact on unit demand. Finally, services revenue is expected to grow but slow year-on-year.
Chris Caso
In dollar terms, iPhone prices are much higher in most countries outside the US, so further increases could hurt the company’s smartphone sales.
Source: ixbt
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