By Danielle Kaye, Paresh Dave and Nivedita Balu
(Reuters) -Apple Inc is surpassing the costly global shortage of computer chips, posting record sales in the holiday quarter, beating revenue estimates and forecasting that its shortfall is shrinking.
The iPhone maker, the world’s largest company by market capitalization, has handled supply-chain challenges such as factory closures and shipping delays caused by the pandemic better than any of its leading peers. , say analysts. Apple shares rose about 5% in trading after hours, erasing half of their losses in the year. The gains came after the company challenged its ambitions for augmented reality in the metaverse https://www.reuters.com/technology/apple-teases-metaverse-ar-plans-stock-jumps-2022-01- 28.
More people want iPhones, iPads and other gadgets in the holiday quarter than Apple has to sell, costing the company more than $ 6 billion in sales, or accordingly it fears. However, Apple, which is part of the suppliers ’largest clientele, has used its purchasing power to squeeze those vendors to ship enough gadgets to record sales in the iPhone, Mac and wearables segments. and its accessories. Apple executives say chip shortages often affect older models of its products and particularly slow iPad sales.
“They’ve navigated the supply chain better than everyone, and it shows in the results,” said Ryan Reith, who studies the smartphone market for industry tracker IDC.
The four best -selling phones in urban China are all iPhone models, Apple said, while competitors struggle to make rival offerings. It is the top seller in China for the first time in six years, research firm Counterpoint Research reported on Wednesday.
Nicole Peng, who tracks China’s smartphone sector at research firm Canalys, said the price was relatively low and the withdrawal of main rival Huawei from the market led to a strong quarter.
Peng said Apple is unlikely to repeat quarterly performance this year, as it is driven by one-off factors. However, he said the company could still have a strong 2022 if Chinese consumers warm up to a new iPhone SE, which is expected to be released this year.
Apple’s growing sales of services like music, TV and fitness subscriptions also help soften the blow of the device’s low supply. The company said it already has 785 million paying subscribers on at least seven of its subscription offers, up 40 million since the previous quarter and soothing investors worried about slowing growth in stocks. rivals such as Netflix Inc.
Even better, Apple Chief Financial Officer Luca Maestri told Reuters that mitigating chip deficits should mean less than $ 6 billion in lost revenue in the current quarter. But he refused to estimate further into the future.
“The level of constraint will depend heavily on other companies, what will be the demand for chips from other companies and other industries,” he said.
RECORD IPHONE UPGRADES
The iPhone 13, which began shipping a few days before the quarter began, led worldwide revenue in phone sales https://tmsnrt.rs/3o4nuGc for Apple of $ 71.6 billion, a 9% increase from 2020 holiday season that easily beat Wall Street targets, according to Refinitiv data. Maestri attributed the fall in sales to a record number of upgrades from older iPhones and double-digit growth in people switching from rivals.
Apple’s total fiscal first quarter revenue was $ 123.9 billion, 11% up from last year and higher than analysts ’average estimate of $ 118.7 billion. Revenue was $ 34.6 billion, or $ 2.10 per share, compared to analysts ’expectations of $ 31 billion and $ 1.89 per share.
Maestri warned that revenue growth was slow in the current quarter compared to the December quarter mainly due to less favorable foreign exchange rates and the different launch dates of the products.
The only segment of Apple’s category that didn’t expect sales were the iPads. Sales fell 14% to $ 7.25 billion compared to analyst estimates of $ 8.2 billion, which seems to confirm industry predictions that tablets will have low priority for any hard part.
Services, Apple’s second -largest segment after iPhones, increased sales 24% to $ 19.5 billion.
Revenue from Mac computers rose 25%, and Apple said the last six quarters were the best for Mac sales.
The pandemic has accelerated the use of digital tools for communication, learning and entertainment, empowering Apple to boost sales over the past two years.
But investors this year are shifting funds toward safer assets and away from tech stocks like Apple that soared during the pandemic that people were spending more time online.
Wall Street questioned how long it would take Apple to deliver its next big product, such as an augmented reality (AR) headset for the metaverse.
“We see a lot of potential in this space and are investing accordingly,” Chief Executive Tim Cook told investors Thursday.
Apple also faces antitrust pressure in the United States and Europe that could lead to new regulations that cut revenue from its services.
Late last month, the Dutch Authority for Consumers and Markets (ACM) ordered Apple to make changes for apps offered in the Apple App Store in the Netherlands before January 15 or face fines, after it learned that the US company abused its market. dominance by requiring former app developers to exclusively use Apple’s in-app payment system.
However, Apple is trading at 27 times expected earnings over the next 12 months. While down from as much as 35 a year ago, it remains above the company’s five -year average of 20 times expected earnings, according to Refinitiv.
(Reporting by Danielle Kaye in New York, Paresh Dave in Oakland, Calif., And Nivedita Balu in Bengaluru; Editing by Kenneth Li, Peter Henderson and Lisa Shumaker)