Apple CEO Cook: China supply and demand significantly improved, discounting activities are not inventory clearance

Apple reported its third-quarter earnings today, and CEO Tim Cook said in an interview that the company will "carefully" consider spending decisions in a slowing economy. Earlier reports indicated that Apple would slow spending and some team hiring in 2023.

Spending carefully, revenue to accelerate

"We believe in investing during downturns, and we always have. We've always found that it makes us stronger on the other side," Cook said Thursday, "and that's the mindset we're approaching this downturn with. Obviously, we are going to be thoughtful in deciding where to invest."

Apple's fiscal third-quarter results slightly beat Wall Street expectations, buoyed by better-than-expected iPhone sales, but some products such as Macs and wearables underperformed expectations.

Cook said in the interview that he expects revenue growth to accelerate in the fourth quarter, despite "weakness in some areas. Cook said he believes "macroeconomic headwinds" affected the company in the third quarter, including in its wearables and digital advertising businesses. He said supply constraints also affected Mac and iPad in the third quarter, but demand for iPad remained strong.

China discounting event

Cook said both supply and demand in China improved "dramatically" in June. "We had some very strong results during the 618 shopping festival," Cook said. Cook said.

Apple's website recently launched a rare four-day discount season. From July 29 to Aug. 1, consumers can save up to 600 yuan on products like iPhone 13 if they pay in select ways. Some analysts say that Apple may be clearing inventory to make way for the September release of iPhone 14.

In response, Cook said the discount "has nothing to do with clearing inventory.