Apple CEO Tim Cook attends the opening event of a new Apple store at The Grove on November 19, 2021 in Los Angeles, California.
Mario Tama | beautiful pictures
Apple CEO Tim Cook said the company is seeing inflationary pressure in an interview with CNBC’s Julia Boorstin on Thursday as a company. reported nearly $124 billion in revenue in its December quarter.
“We try to price our product for the value we deliver, and we’re seeing inflationary pressures,” Cook said. “I think everyone is seeing inflationary pressure. There’s no two way to deal with that.”
Comments from the head of the country’s most valuable company the Biden administration and The Federal Reserve grapples with questions on how to curb rising inflation and whether to raise interest rates.
The consumer price index, an index that measures the increase in prices across a basket of consumer goods, up 7% in December compared with a year earlier, the fastest annual rate in nearly 40 years.
On an earnings call with analysts, Cook expanded on how inflation is affecting Apple’s business and offered an example of shipping costs.
“We’re seeing inflation and it’s factored into our gross margin and our business [Apple CFO] Luca [Maestri] reviewed with you earlier,” Cook said. Logistics, as I mentioned in a previous call, is very expensive in terms of moving things around. “
Cook said he hopes the cost increase is temporary.
“I hope that at least some of that is temporary, but the world has changed and we will see,” Cook said.
Inflation hasn’t hurt Apple’s business, the company reported a gross margin increase in the December quarter, and Apple hasn’t raised prices to deal with inflation in the United States. Cook did not rule out the possibility of a price increase in his interview with CNBC nor during Apple’s earnings call.
Cook also said he expects supply chain constraints, which contribute to inflation, to ease for Apple in the coming months.
In September, Nikkei Asia reports that chip prices are rising at TSMC, Apple’s chipmaker, and that tech companies may decide to pass the increase on to customers. On Thursday, Cook said that “we’re doing well with things that have a leading edge,” referring to the supply of microprocessors that TSMC makes.
Apple doesn’t often raise prices after a product is released, although it does sometimes do so in response to regional economic conditions. For example, last year, Apple raised prices at its online Apple store in Turkey due to the depreciating lira and inflation in the country. hit a two-decade high.
However, Apple sometimes price increase compared to last year’s models when it introduces new iPhones and other devices in the fall.
