iPhone 14 major supply problems could break four year earnings streak

Inside the Apple Store in Knightsbridge, London
(Image credit: Gerald Lynch / Future)

Analysts say that they expect Apple to post its first year-on-year revenue decline since 2019 when the company shares its earnings on Thursday.

The last time Apple posted earnings that represented an annual decline was back in the March quarter of 2019, with analysts of the belief that the company's inability to build its best iPhones quickly enough was a major factor.

Apple's 2022 came to a close amid ongoing production disruption at a key Foxconn plant in China — the only plant capable of building the high-end iPhone 14 Pro and iPhone 14 Pro Max. Things got so bad that Apple warned investors that iPhone availability would be impacted.

"We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models," Apple said in a statement in November 2022. "However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products."

No iPhones, no sales

CNBC reports that some analysts expect Apple to report just over $121 billion in revenue for the December quarter, a figure that would be a decline over the $123.9 billion posted in the same quarter the year prior.

However, some analysts believe that this is a temporary issue and that Apple's value to customers will drive it onward and upward.

“While the state of consumer demand remains a near-term concern, we believe the underlying drivers of Apple’s model - a growing installed base and spend per user - remain intact, and that the strength/stability of Apple’s ecosystem remains undervalued,” Morgan Stanley analyst Erik Woodring wrote in a note earlier this month and seen by CNBC.

Apple, for its part, continues to refuse to give guidance on earnings citing the pandemic and ongoing economic uncertainty.

It isn't all bad news for Apple, however. Analysts expect Apple's Services revenue to grow almost 6% to around $20.67 billion for the December quarter.

Oliver Haslam

Oliver Haslam has written about Apple and the wider technology business for more than a decade with bylines on How-To Geek, PC Mag, iDownloadBlog, and many more. He has also been published in print for Macworld, including cover stories. At iMore, Oliver is involved in daily news coverage and, not being short of opinions, has been known to 'explain' those thoughts in more detail, too. Having grown up using PCs and spending far too much money on graphics card and flashy RAM, Oliver switched to the Mac with a G5 iMac and hasn't looked back. Since then he's seen the growth of the smartphone world, backed by iPhone, and new product categories come and go. Current expertise includes iOS, macOS, streaming services, and pretty much anything that has a battery or plugs into a wall. Oliver also covers mobile gaming for iMore, with Apple Arcade a particular focus. He's been gaming since the Atari 2600 days and still struggles to comprehend the fact he can play console quality titles on his pocket computer.