The rising cost of living squeezed consumers at the end of 2022, leading to a decline in Apple sales.
The iPhone maker saw a 5% drop in quarterly sales from October through December compared to the same period in 2021.Worse than expected, it was the largest drop since 2019.
In the pandemic’s end, the tech industry saw a boom, but now many businesses are warning of a sharp economic slowdown, in which Apple was the most targetted.
Apple CEO Tim Cook has acknowledged the company’s “challenging environment.” He attributed the drop in sales to the strong dollar, supply shortages caused by the Covid-19 outbreak in China (where its phones are made), and the general economic weakness caused by rising prices, the conflict in Ukraine, and the aftermath of the pandemic.
According to Roger McNamee, founding partner of Elevation Partners, Apple’s biggest problem is its supply chain in China, as he stated on the BBC’s Today program.
He said, “Apple, which has historically done the vast majority of its manufacturing in China, has had supply chain issues,” adding, “China has taken a more combative approach with Western economies over the past year and a half, partly due to their zero tolerance on Covid but I think there are other geopolitical issues factoring in as well.”
Globally the number of smartphones shipped sank 12% last year, according to market analysis firm Canalys. This indeed has given a great loss to Apple manufactures.