The year 2022 was hard on every tech company. As the year 2022 began, almost the entire tech industry faced major downtrends, bringing down the stocks and performances of all the tech companies.
However, Apple managed to make it through the difficult times in the first half of 2022. The company tried its best not to get dragged into the tech market downtrend.
Unfortunately, things got out of control for Apple and the company had to face a similar situation as other tech companies.
The company was also plagued by increasing economic pressure and macroeconomic downfalls. Consumers also stopped spending much on Apple iPhones and other devices, bringing down the company’s sales tremendously.
A major pullback has been recorded in the revenues for Apple in the fourth quarter of 2022 and the shareholders are not happy at all.
Analysts Expect a Downtrend in Revenue
The analysts are expecting that the company is going to miss its revenue for the fourth quarter of 2022.
If what the analysts are speculating comes true, it will be the first-ever decline in the history of Apple since 2019. It was the first quarter of 2019 when Apple reported a decline in its year-over-year revenue.
Now, it is going to be the second quarter since March 2019 and the company is expected to report a year-over-year revenue decline.
According to the analysts, the company is set to share its earnings for the fourth quarter of 2022 on Thursday. There is a very high chance that the company may report a revenue decline.
As per the analysts, the company’s revenue has faced a major decline and it is mainly due to multiple factors.
Apple Lacked on iPhone Productions
One of the major factors that caused a decline in the company’s revenue in the fourth quarter is the production lag Apple faced for its high-end iPhones.
Apple has its primary assembly plant based in China and unfortunately, things have not been fine in the country due to the COVID-19 outbreak.
The country faced a major outbreak of COVID-19 cases throughout the year 2022 and it had to undergo several lockdowns.
Among all the areas that were locked down, it was the industrial and business sectors that were impacted the most.
Due to the lockdowns, the assembly facility in China for Apple had to undergo several lockdowns. Even in the last quarter, the assembly plants had to undergo lockdowns.
The analysts at multiple investment firms were already aware of the possibility that the company may not be able to meet the iPhone demand.
They had already started to lower the production targets for Apple as the month of November began. They even predicted that Apple won’t be able to meet the Christmas and Holiday period demand for the iPhones.
Warnings by Apple
Although Apple tried its best to meet the demand, it realized that the analysts were right. Therefore, it started to warn the shareholders that the company will not be able to meet the demand for the iPhones.
The company intimated that due to the unexpected shutdowns of the primary assembly plant in China, Apple knew it would face problems with the shipment.
The analysts had also reduced the share price target for Apple as they were highly speculative about the shipment problem with the company.
According to multiple sources, customers based in the United States had to wait for more than 34 days for their iPhone 14 Pro Max and 14 Pro models.
Revenue Expectation from the Analysts
For the fourth quarter, the analysts expect the company may report a revenue worth $121 billion. However, in the same quarter of 2021, the company reported $123.9 billion in revenue.
Following the announcement, Apple’s share prices recorded a 2.01% dip in the latest trading session.