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Tim Culpan

Maybe Apple’s Weakness Isn’t Just Supply Chain Woes

High-priced smartphones are less of a priority for consumers amid growing economic uncertainty.

A sense of foreboding.

A sense of foreboding.

Photographer: Krisztian Bocsi/Bloomberg

Apple Inc.’s earnings were an even bigger disaster than expected thanks to a combination of a stronger US dollar, global economic malaise, and more strife at its China factories. That analysts were unable to model for each of these known factors could signal that problems will persist even after supply returns to normal.

A 5.5% drop in December-quarter revenue to $117.2 billion was the widest miss for the holiday period in seven years. Sales of iPhones, Macs and wearables all dipped from a year prior. As much as $7 billion may have been left on the table after a Covid-19 outbreak and harsh lockdowns at a key production site operated by Foxconn Technology Group in November led to workers storming out of the Zhengzhou factory. At the time, Bloomberg Opinion estimated the impact to be $6 billion to $7.2 billion, so the scale of the hit was largely known.