Apple's iPhone 14 Pro appears to be popular with customers, with executives saying the company hasn't caught up with demand a month after initial release -- and even though supply chain issues have eased. The comments about the phone's apparent success, which the company made Thursday, were an unusual bit of positive news out of the tech industry, which has collectively begun warning of a worsening economy ahead of the holiday shopping season.
The tech giant said sales of its iPhone 14 line of phones rose to $42.6 billion, up 10% from $38.9 billion the same time a year earlier. The iPhone's continued success followed a similar rise in overall sales, which rose 8% to $90.1 billion, and its profits, which edged up less than 1% to $20.7 billion.
Some of Apple's successes came from the company's newly updated Mac computers, as well as its upgraded $399 Apple Watch Series 8, redesigned $249 AirPods Pro and newly announced $799 Apple Watch Ultra. Still, its most important product was the iPhone 14 series of phones, which start at $799 and made up nearly half the company's overall revenue.
Despite Apple's relatively successful report, Apple CEO Tim Cook acknowledged that the economy is looking "increasingly difficult," something his peers at companies including software maker Microsoft and chipmaker Intel have also warned. "A lot of people in a lot of places are struggling," he said during a conference call Thursday. "We are still living through unprecedented times."
Apple's stock rose 8% to $156.47 per share the day after reporting earnings. Still, the stock's fallen about 14% so far this year, valuing the company at about $2.5 trillion.
Apple's financial disclosures add to a growing tapestry of information about world economy amid the coronavirus pandemic, Russia's war on Ukraine and nagging inflation. Other tech giants, including Google parent Alphabet, Facebook parent Meta and Amazon have said each of their businesses are being hit by economic troubles as well.
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Analysts also noted that even though Apple reported increased iPhone sales, sales hadn't jumped as much as in past years, suggesting potentially lower demand or that more people had shifted to the supply-constrained iPhone 14 Pro line.
"We continue to worry about iPhone unit growth amid elongating replacement cycles following two strong years of sales -- particularly in China -- and an increasingly pressured consumer," Bernstein Research analyst Toni Sacconaghi wrote in a message following Apple's report. Though Apple doesn't report iPhone unit sales anymore, Sacconaghi is expecting the company to sell 7% fewer devices than it did this year.
Aside from the iPhone, Apple said it tallied sales growth in each of its major product categories, except the iPad, sales of which dropped 13% to nearly $7.2 billion from the same time a year ago. Sales rose in nearly every major market in which Apple sells as well, including a 6% rise in China, 8% higher sales in the Americas, and a nearly 10% jump in European sales. In Japan, though, sales fell nearly 10%.