Apple, Google profits squeezed on China, sluggish economies

Amazon, the world’s largest online retailer, cautioned of uncertainty in the months ahead as it reported lower-than-anticipated revenue and profitability for the final three months of 2022.

The largest firm in the world by market value, Apple, attributed the decline in sales of its flagship iPhone to production problems in China.

Apple’s revenue for the three months that ended in December was $117.1 billion, down 5.4 percent from the same period last year. Sales and profit fell short of experts’ projections, while profit after taxes came in at $30 billion.

The strict restrictions imposed in accordance with Beijing’s zero-COVID policy, which resulted in some phone-making factories being locked down, had a significant impact on the company’s ability to deliver exports for the important year-end holiday season. China is Apple’s primary location for iPhone production.

Even if China has now softened its policy, concern over the status of the world economy persists.

In order to control inflation brought on by sky-high energy prices, central banks around the world have been raising interest rates. However, consumers are also making cuts due to rising living expenses and stagnant wages.

Jesse Cohen, an analyst with Investing.com, stated that it was evident there were “many issues the tech sector faces amid the present economic context of sluggish growth and increased inflation” after Google revealed a fall in revenue and profit for the three months ending in December.

Although its result was disappointing, Alphabet, the parent company of Google, nonetheless made $13.6 billion in profit despite the fall in ad sales. Only two quarters had fallen since the dominant search engine went public in 2004.

In a conference call with analysts, Google CEO Sundar Pichai stated, “It’s apparent that the macroeconomic backdrop has grown more challenging after a period of huge acceleration in digital expenditure during the pandemic.”

It’s obvious that the financial environment has gotten more difficult after a period of great acceleration in digital spending during the pandemic, Google CEO Sundar Pichai said in a call with analysts.

As a result of overhiring during the COVID pandemic, when many people turned to the internet for work and amusement, tech corporations including Google and Amazon have revealed plans to fire more than 50,000 individuals combined in recent weeks.