Tim Cook is pushing back against a slight stock hit after Wall Street took a look at the company’s fourth-quarter earnings.
Today, Apple announced its earnings for the fourth quarter of 2022. Despite all of the economic and health-related challenges that the world has been experiencing this quarter, the company posted a new revenue record of $90.1 billion, an eight percent growth year over year.
Cook believes that, without “the foreign exchange headwinds,” Apple would have grown double digits in the fourth quarter.
While the iPhone did well, newer models are still constrained. Cook talked to CNBC and said that this was due to supply constraints that the company continues to attempt to solve, especially with its iPhone 14 Pro and iPhone 14 Pro Max. “We clearly countered the industry trends on the on the phone if you look at third-party estimates of what the smartphone industry did,” Cook said.
The Apple CEO also touched on hiring. Like many companies right now, Cook said that Apple is “hiring deliberately, and so we’ve slowed the pace of hiring.” The CEO has used the term deliberate to describe its hiring strategy in recent months, indicating that the company has no plans to expand hiring in the near future.
Cook was asked about Apple’s recent price increases for Apple Music, Apple TV Plus, and Apple One, the company’s subscription bundle service. “If you look at the price increases as an example, Music, the licensing cost has increased,” Cook said.
Apple’s services business is slowing
Apple’s services business might be the most disappointing to Wall Street this quarter. While the business grew double digits at twelve percent last quarter, it only grew five percent in the fourth quarter of 2022.
The Mac may have been the biggest surprise of the quarter. Sales were up 25% to $11.51 billion in the fourth quarter, still riding off of the transition to Apple silicon with the M1 and M2 chips as well as the MacBook Air, iMac, and MacBook Pro redesigns.
While wearables, which include AirPods and the Apple Watch, grew 10% year-over-year to $9.65 billion, the iPad business continues to shrink and, in the fourth quarter of 2022, declined 10% year-over-year.