Tim Cook: iPhone manufacturing shortfall main reason for earnings miss

AppleInsiderAppleInsider
Posted:
in iPhone edited February 2023
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 8
    waveparticlewaveparticle Posts: 1,497member
    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 8
    baconstangbaconstang Posts: 1,105member
    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 2023 JP234watto_cobra
  • Reply 3 of 8
    netroxnetrox Posts: 1,421member
    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 4 of 8
    baconstangbaconstang Posts: 1,105member
    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 5 of 8
    danoxdanox Posts: 2,849member
    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 6 of 8
    robin huberrobin huber Posts: 3,958member
    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 7 of 8
    applebynatureapplebynature Posts: 115member
    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
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