Tim Cook: iPhone manufacturing shortfall main reason for earnings miss

AppleInsiderAppleInsider
Posted:
in iPhone edited February 2
After Apple's warning in November about COVID issues, CEO Tim Cook still mainly blames manufacturing problems in China for why Apple sold "significantly less" of the iPhone 14 range than expected.

A Foxconn facility
A Foxconn facility


Speaking in an earnings call that revealed Apple missed its expected revenue target for the first time in four years, Cook blamed COVID for most of Apple's problems in the quarter.

"COVID-19 related challenges... significantly impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max," said Cook, "[which] lasted through most of December."

"Because of these constraints, we had significantly less iPhone 14 Pro and iPhone 14 Pro Max supply than we planned," he continued, "causing ship times to extend far beyond what we had anticipated."

He also said that Apple's results were also affected by foreign currency exchange rates spawned by a strong dollar, and an overall challenging economy.

Cook says that if it were not for foreign exchange headwinds, the company "would have grown in the vast majority of the markets we track."

However, following defining why Apple had a tough iPhone quarter, Cook also said that "production is now back where we want it to be."

That production is chiefly at Foxconn's plant in Shenzhen, China, where COVID lockdowns drastically affected the company.

Read on AppleInsider

Comments

  • Reply 1 of 10
    waveparticlewaveparticle Posts: 1,212member
    China made 180 degree turn on zero Covid policy in early December. Pandemic followed and peaked in late  December and early January. At the end of January pandemic has dropped to less than 10% of the peak. 
    watto_cobra
  • Reply 2 of 10
    baconstangbaconstang Posts: 975member
    Why do they call it "earnings miss" or "failed to meet expectations"?
    Apple is just working on doing what they do, making great devices and providing innovative services.
    Call it what it is.  The prognosticators are pretty lame at making predictions.
    Maybe a better benchmark would be how many (or few) employees were laid off?
    edited February 2 JP234watto_cobra
  • Reply 3 of 10
    JP234JP234 Posts: 1,067member
    Well, in a quarter by quarter stock market, a supply constraint can be damaging to a stock's price. But with an intensely loyal user demographic, it should present no long term damage to Apple's stock price. No one is going to migrate to Samsung just because he'd have to wait a month or so to get an iPhone upgrade. Certainly not me. Although I'm not due for an upgrade until the iPhone 15 Pro. And if I have to wait 9 months or more, I'll continue to use my 11 Pro until then.

    My first smartphone was a cheap Android that came with a prepaid TracFone account. Never again. Never. Again. Not for cheap, not for free.
    FileMakerFellerwatto_cobra
  • Reply 4 of 10
    netroxnetrox Posts: 1,309member
    There are literally many articles citing that Apple has having delays with iPhones due to COVID policies.  

    That's expected. 

    But if people gonna poke fun of Apple and exclaimed, "Apple is doomed!" they're idiots. 
    watto_cobra
  • Reply 5 of 10
    baconstangbaconstang Posts: 975member
    JP234 said:
    Well, in a quarter by quarter stock market, a supply constraint can be damaging to a stock's price. But with an intensely loyal user demographic, it should present no long term damage to Apple's stock price. No one is going to migrate to Samsung just because he'd have to wait a month or so to get an iPhone upgrade. Certainly not me. Although I'm not due for an upgrade until the iPhone 15 Pro. And if I have to wait 9 months or more, I'll continue to use my 11 Pro until then.

    My first smartphone was a cheap Android that came with a prepaid TracFone account. Never again. Never. Again. Not for cheap, not for free.
    Yeah.  I'm waiting for an iPhone 1x mini.   
    I used my original SE for 4-5 years until the 12 mini came out.  I can wait another few until they revisit the mini form factor.
    Ain't buying a phone that won't fit in my pocket...
    rotateleftbyteJP234watto_cobra
  • Reply 6 of 10
    danoxdanox Posts: 1,722member
    JP234 said:
    Well, in a quarter by quarter stock market, a supply constraint can be damaging to a stock's price. But with an intensely loyal user demographic, it should present no long term damage to Apple's stock price. No one is going to migrate to Samsung just because he'd have to wait a month or so to get an iPhone upgrade. Certainly not me. Although I'm not due for an upgrade until the iPhone 15 Pro. And if I have to wait 9 months or more, I'll continue to use my 11 Pro until then.

    My first smartphone was a cheap Android that came with a prepaid TracFone account. Never again. Never. Again. Not for cheap, not for free.
    I currently have an 11 Pro iPhone too, if Apple had released a new iPhone without any notch (I hate the notch), I would have upgraded, and if there was a larger screen, 30” or 32” iMac or new Mac Pro released I would’ve also upgraded. The demand is there for new Apple products, Apple just needs to execute and get them out the door. I don’t think Apple gonna be missing any sales long term most (including me) will just save and wait it out.
    baconstangJP234watto_cobra
  • Reply 7 of 10
    robin huberrobin huber Posts: 3,763member
    True to the contrarian nature of the market when it comes to Apple stock, when it breaks records making money (nearly always) the stock dives. On one of the very rare occasions it didn’t, the stock leaps! 
    watto_cobra
  • Reply 8 of 10
    JP234JP234 Posts: 1,067member
    baconstang said:
    JP234 said:
    Well, in a quarter by quarter stock market, a supply constraint can be damaging to a stock's price. But with an intensely loyal user demographic, it should present no long term damage to Apple's stock price. No one is going to migrate to Samsung just because he'd have to wait a month or so to get an iPhone upgrade. Certainly not me. Although I'm not due for an upgrade until the iPhone 15 Pro. And if I have to wait 9 months or more, I'll continue to use my 11 Pro until then.

    My first smartphone was a cheap Android that came with a prepaid TracFone account. Never again. Never. Again. Not for cheap, not for free.
    Yeah.  I'm waiting for an iPhone 1x mini.   
    I used my original SE for 4-5 years until the 12 mini came out.  I can wait another few until they revisit the mini form factor.
    Ain't buying a phone that won't fit in my pocket...
    I keep a 2020 SE that I only use when I'm out bicycling. Fits neatly sideways in my back jersey pockets, so it doesn't fall out when I hit a bump!
    watto_cobra
  • Reply 9 of 10
    applebynatureapplebynature Posts: 58member
    baconstang said:
    Why do they call it "earnings miss" or "failed to meet expectations"?
    Apple is just working on doing what they do, making great devices and providing innovative services.
    Call it what it is.  The prognosticators are pretty lame at making predictions.
    Maybe a better benchmark would be how many (or few) employees were laid off?
    Welcome to Capitalism. You're a bit late to the party, as it's already begun it's decline. But at least you'll get to play along for another few decades as it inevitably gets even worse. Always every increasing profits and production for the sake of the stock market is a necessity.
    watto_cobra
  • Reply 10 of 10
    JP234JP234 Posts: 1,067member
    baconstang said:
    Why do they call it "earnings miss" or "failed to meet expectations"?
    Apple is just working on doing what they do, making great devices and providing innovative services.
    Call it what it is.  The prognosticators are pretty lame at making predictions.
    Maybe a better benchmark would be how many (or few) employees were laid off?
    You need to understand how markets work. The "They" you cite are market analysts. "They" use many different tools to predict what a publicly held company will earn in a quarter. When the actual earnings are released by the company, they either miss, meet or exceed those analyst's performance expectations. Many companies provide "guidance" to these analysts in an effort to set expectations low so the stockholders can temporarily benefit from a price jump when the company outperforms those artificially low expectations. Microsoft and Apple have a long, long history of this activity. Or they can go the other way, so insiders can sell off their artificially inflated stocks before the poor earnings report crashes the stock.

    Gone are the days of Graham & Dodds "Securities Analysis," Warren Buffet's bible. One old school example: A railroad company announces that they are planning to increase their railway service by 20% in the next two quarters. But taking a hard look at their two previous earnings reports, you find that they're actually decreasing purchases of lumber and steel, leading you to realize that they're misleading shareholders in their guidance.

    But the axiom, "do your own research" has never been more timely. Bottom-up numbers always tell the truth of the situation. Top-down numbers come from parties with vested interests (and they're wearing the vest).
    watto_cobra
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