Apple surpasses expectations as tech companies struggle in slow economy

Apple reported higher than expected profit and sales as demand for iPhones holds steady even amid inflation and the challenges of an economic slowdown.

There has has been no slowdown in demand for iPhones, Apple CFO Luca Maestri told Reuters. Apple reported iPhone sales were $40.7bn, up about 3% from a year earlier and well ahead of the overall global smartphone market. But the slowing economy is hurting sales of advertising, accessories and home products, Maestri said.

Parts shortages will continue to limit Mac and iPad sales, Maestri said, though the impact has been easing.

In April, Apple warned it expected a growth slowdown despite its stronger-than-anticipated quarterly results. The company has struggled with Covid shutdowns at factories in China and a computer chip shortage.

Apple has managed to maintain greater stability than other tech giants that have announced hiring slowdowns and layoffs. But the company does plan to slow hiring and spending next year in an effort to be more cautious as an expected recession looms, Bloomberg reported this month.

After seeing record profits during the pandemic, the industry as a whole has struggled for months amid rising interest rates, inflation and sluggish economic growth. The tech-driven Nasdaq composite index has already fallen by 26% this year.

Reuters contributed to this report