Apple in China Shock

Apple's declining China revenues cast a shadow over its balance sheet performance. Tech giant Apple, which exceeded expectations in its overall balance sheet, worried its investors with its falling China revenues. In the quarter ending December 30, Apple's China sales fell by 13 percent to $20.8 billion. Thus, Apple's lowest China revenue was realized in the quarter that included December since 2020. Analysts were expecting $23.5 billion in China revenue from Apple. Apple CFO Luca Maestri stated that they were not pleased with the decline in China sales and predicted a horizontal revenue growth for the current quarter. Apple's revenue is slowing down due to slowing consumer spending and fierce competition in China despite incentives. Huawei's 36 percent increase in orders in China by launching new generation phones explains Apple's slowing sales. The China decline also overshadowed Apple's overall balance sheet success. The company increased its revenue by 2.1 percent in the quarter to $119.6 billion, exceeding analyst expectations. Despite this, Apple shares fell by more than 3 percent in the futures market. Positive balance sheet in technology giants Meta Platforms and Amazon, which announced their balance sheets on Thursday and are among the “Magnificent Seven” companies, reaped the fruits of the cost measures they implemented in 2023, especially workforce cuts. Meta, which includes platforms such as Facebook and Instagram, exceeded expectations with $40.1 billion in revenue and $14 billion in profit in the last quarter of 2023. Meta, which will pay a dividend of 50 cents per share for the first time in its history, also announced plans to buy back $50 billion in shares. Meta shares rose by more than 14 percent in the futures market. Amazon, on the other hand, increased its revenue by 14 percent to $70 billion in the same quarter. Amazon’s revenue growth was almost twice as high as its spending growth rate. Amazon shares rose by more than 7 percent in the futures market. Meta reduced its staff by 22 percent in 2023, while Amazon laid off 35,000 employees last year as part of cost measures it began in 2022.