Apple is losing a lot of money, and we will pay for it

Written By O. Love

Companies submit financial statements several times during the year . It is on its quality that both the value of shares and further expectations of investors depend. Last week, Apple also showed such a report . It is from it that you can determine how successful the previous quarter was for the company from Cupertino and what will happen on the market in the future. Unfortunately, following the results of studying this report and what actions Apple is taking regarding its products, there is a rather disturbing situation.

One of the main indicators for almost any company is net profit, which decreased by 11% . In the volumes that Apple operates, this is a very significant amount. Considering how Cupertino saves money and tries to squeeze every last cent out of every device and service, this is a very bad sign for users. Let’s see how these indicators will affect the cost of the company’s devices.

Apple Report 2022

Apple continues to make very good money, but will soon have to raise prices.

Profit is one of the most important reporting indicators. But it does not always reflect the real essence of what is happening. Many companies sacrifice this item in their reporting for the sake of sales in order to take market share. Given that in recent years Apple has said that services revenue is becoming more important to it than iron sales, the company needs to maintain sales at a certain level. Due to the increase in the cost of most components of smartphones, tablets and computers and problems with the supply chain, we can conclude that the cost of production of all the company’s devices has increased.

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But for most of the line and in most countries , Apple kept the price of its devices the same. This fact, together with practically unchanged revenue, which grew by only 2%, explains the reason for the decline in profits for the quarter. Apple is simply donating a share of its profits in every device. Naturally, everyone understands that this cannot continue indefinitely, and either further price increases will follow, or they will have to deliberately degrade the characteristics of their devices.

We can already observe the latter on the example of Macbooks on the M2 chip. In these devices, in the minimum configuration, not two memory modules are installed, but one. Because of this, some of the most popular laptop models work with memory much slower than their predecessors. Apple ‘s explanations that the speed of work was not affected do not stand up to criticism and real user tests.

The next deterioration is expected in the future iPhone 14 line . Base models will not have new processors and will retain the old front camera design. Usually all iPhones of the same line received the same processors, but it seems that everything is being done this year to keep the price down. It is not yet known how they will deal with future Macbooks 14 and 16 on M2 processors . To date, these laptops are the flagships of the Macbook line , and you can’t just degrade their performance just like that. They, of course, according to the good old tradition, may lose the charger in the kit, but, most likely, Apple will not waste time on trifles, but simply increase their cost. What would be the most logical step in this situation.

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But, on the other hand, both factors converged in the MacBook Air on the M2 processor . And a price increase of $200, and deterioration in performance.

Apple technology prices

The cost of tablets, most likely, will also be subject to adjustment. New iPads may not be budget at all.

It is impossible to draw any unambiguous conclusions about how much Apple will risk raising prices for its products. You can only build on the numbers that are in the reporting. Given that the Cupertino-based company lost 11% of net profit, we can assume that the average increase in prices for the company’s devices will be about 10%. For some products, like the MacBook Air M2 , it was 20%. Some categories of goods will rise in price not so much.

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What, in my opinion, will definitely either remain unchanged or undergo a minimal price increase – these are Apple services . Currently, Apple has 860 million paid subscriptions for various services. That is 160 million more than last year. Such growth can be called unprecedented. Users really appreciated the convenience and quality of the company’s services and use them without looking back at competitors. 

To offset price increases, Apple will actively develop services that allow customers to facilitate the purchase of their products. In particular, the emphasis will be placed on various Trade-in programs and installment plans. It is thanks to them that Cupertino expects to prevent sales from collapsing in future periods. However, the company did not share its revenue forecast for the next quarters. It is this fact that suggests that the crisis future is not far off, and even such large companies cannot predict future events.

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