The final quarter of 2022 was a tough time for Apple as the company experienced a drastic decline in sales due to the increasing cost of living. According to the latest numbers, Apple saw a 5% drop in sales in the three months ending December 2022 compared to the same period the previous year, which is the largest decrease since 2019 and has taken many by surprise.
With the economy slowing down and many companies warning of a sharp slowdown in the tech sector, Apple CEO Tim Cook is facing a “challenging environment.” Cook pointed out several reasons for the sales decline, including supply shortages caused by the Covid-19 pandemic in China (where Apple’s phones are manufactured), a strong dollar, and the impact of the pandemic, the conflict in Ukraine, and rising prices on the wider economy.
Cook shared in a conference call with investors, “We know that Apple is not immune to the unprecedented circumstances the world is facing.” The sales decline was felt globally and affected most of Apple’s products, with iPhones experiencing an 8% drop in sales and Mac computers seeing a decrease of 29%.
This decrease in sales has led to a 13% drop in profits to $30 billion (£24 billion), and Cook and his team expect sales to continue declining in the future.
Other major tech companies also reported difficulties in their recent updates to investors. Amazon, which has been trying to revive its e-commerce business, reported a 2% decrease in sales at its online stores in the last quarter of 2022 compared to the previous year. However, Amazon’s overall sales rose 9% to $149.2 billion, driven by strong growth in its cloud computing business. Despite this growth, profits fell significantly, dropping from $14.3 billion to near zero.
Alphabet, the parent company of Google and YouTube, reported a 1% increase in sales in the three months ending December 2022 compared to the previous year. This was due to a reduction in advertising, which is the company’s main source of revenue, as companies cut back on spending in the face of economic uncertainty.