Apple’s Tim Cook blames supply disruption from China’s pandemic controls for revenue drop
- ‘Covid-19 challenges … significantly impacted’ iPhone supplies, the CEO said, after the world’s largest iPhone factory faced protests last year
- Apple’s fourth quarter revenue fell for the first time since early 2019, which Cook also blamed on a strong dollar and economic challenges
“Covid-19 challenges … significantly impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max and lasted through most of December,” Cook said during an earnings call, citing a November notice that the company put up warning that restrictions forced its major iPhone factory in the city of Zhengzhou to operate “at significantly reduced capacity”.
But “production is now back where we want it to be”, he added.
Apple on Thursday reported US$117 billion in revenue for the quarter ended December, down 5 per cent from a year earlier. Profit tumbled 13.4 per cent to US$30 billion.
“Foreign exchange headwinds” amid a strong dollar and “a challenging macroeconomic environment” also weighed on earnings, Cook said.
Another factor was weak demand in China, where the company saw a 7 per cent decline in sales amid Covid-19 restrictions, according to Cook. Once those controls were relaxed, there was a “marked change in traffic in our stores”, he said.
Sales in Greater China – which includes Hong Kong, Macau and Taiwan but which mostly come from the mainland – were down to US$23.9 billion for the quarter.
