Apple hopes it can count on loyal customer base to shore up earnings

Despite growing concerns about the state of the global economy and consumer spending amid soaring inflation, Apple will hope it can still count on its loyal customer base to shore up its earnings. 

But the tech giant faces strong headwinds as it reports third-quarter results on Thursday. Investors will look at how much damage China’s strict lockdowns have caused, with factory shutdowns potentially hitting production while customers will have been kept away from its stores.

Apple expected to suffer a £3.3billion to £6.6billion hit to its sales as a result of weaker Chinese demand and supply chain disruption, and analysts will be eyeing the final figure. 

With sales of phones, tablets and computers likely to take a hit, some investors will be hoping the services business, which includes Apple Music and its Apple TV+ streaming service, has offset the impact. 

The outlook for the year will be crucial amid concerns about high inflation and the cost of living crunch. 

A new iPhone is expected to launch this year, but there are concerns fewer shoppers will splash out as budgets are being stretched. Meanwhile, Apple is not immune to rising costs. 

How big an impact pricier transport and materials are having will be closely watched, particularly if it indicates it could raise prices in response. 

Some will look for clarity on plans for its workforce, following reports Apple was looking to hold off hiring new staff and spending increases to cope with a possible recession.