Shulou(Shulou.com)11/24 Report--

Beijing time on February 2 evening news, According to reports, Apple's upcoming new quarterly earnings report, May become the industry's other companies weather vane.

Apple will release its first quarter earnings report for fiscal year 2023 on February 2 (early morning of February 3, Beijing time)(natural month is October-December 2022). Technology companies such as Intel, Snap and Microsoft have already released less optimistic fourth-quarter 2022 earnings.

If you think apple will stand out from the rest of the tech world alone, you might be premature. Analysts expect Apple to see its first quarterly profit decline since 2019.

The last time Apple reported a profit decline, the reason was simple: global smartphone sales stagnated. This time, analysts believe that there are many reasons, including the epidemic and high inflation, which have led to a decline in smartphone demand.

According to IDC, an authoritative research firm, iPhone shipments in the fourth quarter of 2022 were 72.3 million units, down 14.9% from 85 million units in the fourth quarter of 2021. In addition to falling demand, the epidemic has also affected iPhone supply.

Moreover, Wamsi Mohan, an analyst at BofA Global Research, said in a report that it's not just a matter of selling iPhones to users.

We believe apple faced challenges in the first half of the year because of a slightly weaker iPhone cycle, both supply and demand issues,"mohan said." As for the second half, it will depend on the next iPhone cycle and AR / VR contributions. "

If Mohan's prediction is correct and Apple's iPhone sales take a hit, the outlook for other tech companies will be bleak or even more bleak.

During last quarter's earnings call, Apple Chief Financial Officer Luca Maestri warned that while the company performed well in 2022, things would get tough in 2023. Regulatory Masteri offered no specific guidance for the quarter, citing "uncertainty still around the world," but he did hint at Apple's performance in the months ahead.

Masteri was expecting a slowdown in revenue year-over-year for the quarter. The main problem is that Apple is expected to see negative currency headwinds of nearly 10 percentage points. In addition, Mac sales will also be "significantly lower" year-on-year compared with business growth during the epidemic.

Mohan expects Apple's services revenue to slow due to a strong dollar and slower growth in digital advertising.

Wedbush analyst Dan Ives, meanwhile, lowered his price target on Apple to $174 from $200, citing concerns about falling demand affecting Apple's revenue.

So far, Apple has been the best of big tech companies, even by the standards of the epidemic era. Apple has reported record revenue every quarter since 2020. This is due to strong iPhone sales and growth in its services, wearables and Mac businesses.

Of course, other companies in the tech industry have had impressive results, but Apple is the only company with a market cap of $3 trillion. The milestone was set in January 2022, but then tech stocks took a beating. Apple's market cap is currently about $2.2 trillion.

Still, apple's stock has outperformed its nearest big tech competitors. As of Wednesday, Apple's decline in the past 12 months was just 18%, slightly better than Microsoft's 20% decline, but much higher than Alphabet (26%), Amazon (31%) and Meta (52%).

Apple has also avoided mass layoffs so far. Meta laid off 11,000 employees last November. Amazon, Alphabet and Microsoft followed suit in January, cutting 18,000, 12,000 and 10,000 jobs, respectively.

Why? Apple didn't hire on a large scale throughout the epidemic, so employee growth was small. By contrast, companies such as Amazon and Meta have grown their headcount by more than 90 percent since the fourth quarter of 2019.

Apple CEO Tim Cook has also cut his 2023 salary by 40 percent to a target of $49 million. Alphabet CEO Sundar Pichai also cut his salary, but he has to deal with layoffs.

Apple still has tricks up its sleeve Although Apple, like others in the tech industry, is facing a potentially tough quarter, expect the company to release some big news in the coming months.

Last month, Apple introduced a new Mac computer. But soon, we'll see new iPhones and Apple Watches in the fall. The bigger news is that Apple may release its long-awaited "Mixed Reality"(MR) headset sometime this spring.

That alone should boost Apple's profits, though don't expect it to replace the iPhone as Apple's primary breadwinner for some time. For now, however, Apple just needs to get through the first quarter without much pain.

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