Apple’s revenues dropped sharply in the fourth quarter of 2022 due to the accelerating outbreak of COVID-19 in China, Financial Times reported.
The corporation’s net profits decreased by 8% in its biggest decline in 3 years. FT predicts that Apple’s revenues are unlikely to increase in the near future.
According to Visible Alpha, 90% of Apple iPhone smartphones are assembled in China, and a fifth of Apple’s revenue comes from sales in the Chinese market. However, the latest COVID-19 outbreak disrupted production as absenteeism affected Apple’s manufacturing facilities, resulting in an estimated shortage of between 5 million and 15 million iPhones.
Furthermore, Apple’s sales were negatively impacted by supply chain issues. “The next two to six months really will be a defining moment for Apple’s supply chain,” Alan Day, chairman of London-based supply chain consultancy firm State of Flux said. However, the corporation is expected to resume its normal operations once the epidemiological situation in China stabilizes.
The massive outbreak led to hundreds of millions of new infections, Bloomberg reported, increasing concerns that the Chinese economy may slow down. So far, these fears have not come true.
