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Apple's Record Profit Hit by Layoffs and iPhone Air Flop
26 Nov
Summary
- Apple achieved record net income of $112 billion and forecast record December quarter revenue.
- Despite strong financials, dozens were laid off due to sales department reorganization.
- The new iPhone Air is underperforming, selling only a third of optimistic expectations.
Apple concluded its fiscal year with exceptional financial results, reporting a record $112 billion in net income and exceeding expectations with $102.5 billion in quarterly revenue. The company anticipates the upcoming December quarter will be its best ever, driven by strong iPhone sales and robust gross margins. This success story is tempered by recent news of layoffs within its sales department, impacting "dozens" of employees as part of a company reorganization.
The latest iPhone 17 series is showing strong demand, outpacing its predecessor in key markets like the U.S. and China, possibly indicating a renewed consumer appetite for upgrades. However, the new iPhone Air has faced considerable headwinds. Despite significant pre-launch hype and a radical redesign, its sales have fallen drastically short of internal forecasts, leading to reduced production plans and prompting an analysis of its pricing strategy and feature compromises.
Financially, Apple has entered the elite $4 trillion market valuation club, bolstered by a significant surge in its share price. This valuation highlights investor confidence in its integrated device-and-services model. Concurrently, its Services division surpassed $100 billion in annual revenue for the first time. Despite these achievements, the company faces scrutiny over its artificial intelligence progress compared to competitors, with plans to increase R&D spending.
