[ad_1]

Apple, Inc. AAPL rumored curb on spending and hiring across teams in 2023 is in anticipation of an economic slump – the first time the company is looking vulnerable to external factors such as rising interest rate, stronger U.S. dollar and the threat of a recession, Bloomberg columnist Mark Gurman said.

The Apple writer also highlighted the kinks in Apple’s supply chain, which may limit the availability of some of its next devices.

Apple has thus far avoided lay-offs and hasn’t issued any public statement on its hiring and spending cut plans, but it could hint at the move during Thursday’s earnings call, Gurman said.

FQ3 Results Likely To Slower Growth: Analysts are rooting for 2% year-over-year sales growth to around $82.7 billion for Apple’s fiscal year third quarter, the slowest pace since 2020, Gurman said. This is a “major deceleration” from the 36% sales jump in the third quarter of 2021, he noted.

iPhone revenue will account for a little less than half of that and the Services business will contribute about $20 billion, the columnist said, citing analysts.

Related Link: Why Apple Has ‘Little To Lose, A Lot To Gain’ By Expanding Its Services To Android Devices

Apple’s Multiple Challenges: Gurman said Apple’s challenges “go beyond the latest economic concerns.” He listed three potential areas of concern:

  • The company already flagged in the previous quarter’s earnings call a $4 billion to $8 billion hit from supply chain disruptions, primarily stemming from China lockdowns and chip shortage.
  • Apple is facing a tough comparison, as the third quarter of 2021 included pandemic-induced spending by people “outfitting their home offices.”
  • The latest MacBook Air was announced in the third quarter, but didn’t arrive until the fourth quarter. This prompted most customers to hold off on purchases of MacBook Air, its most popular Mac.

If at all consumers splurge on technology, contingent on an improvement in economic conditions, they may wait for the latest iPhone, AirPods Pro, Apple Watch and iPad to arrive this fall, Gurman said.

“If the economy does take a dive, it’s only going to get harder,” he added.

Apple Can Bounce Back: Gurman still thinks Apple will be able to “bounce back fairly quickly.”

The view is based on a flood of products lined up for release that would tempt even recession-wary shoppers.

  • Four iPhone 14 models
  • A new Apple Watch SE, Apple Watch Series 8 and high-end “Pro” Apple Watch
  • An updated HomePod
  • A new Apple TV
  • Updated iPad Pro models with an M2 chip and a new low-end iPad with a USB-C port
  • The revamped Mac Pro with an M2-based chip
  • The long-anticipated mixed-reality headset
  • A larger, 15-inch MacBook Air
  • New M2 and M2 Pro Mac minis
  • Upgraded AirPods Pro earbuds
  • New 14-inch and 16-inch MacBook Pros with M2 Pro and M2 Max chips

“With such a strong product pipeline in place for the next 12 months or so, it’s hard to be that concerned with Apple’s prospects,”Gurman said.

Apple closed Friday’s session down 0.81% at $154.09, according to Benzinga Pro data.

[ad_2]

Source link