Apple is said to see faster sales growth despite the current state of the economy as the company has made it known that parts shortages are on the decline while demand for iPhones is unceasing. This will shuttle the American tech giant to top the Wall Street expectation according to a new forecast.

The company’s share soon rose by 3.5% right after the results were released.

Despite the tough state of the economy across the globe, the company’s CFO, Luca Maestri in a briefing told Reuters there had been no slowdown in demand for iPhones which is the company’s biggest source of revenue.

In fact, smartphone sales in the fiscal third quarter have risen by 3% to US$40.7 billion despite Wall Street bracing for the complete opposite of the said growth. However, the overall global smartphone market on the other hand has dropped by 9% during the just-ended quarter based on data gotten from Canalys.

Apple’s loyal customer base has helped the brand to keep its consumer spending on its plethora of products, especially the iPhone thanks to its “ecosystem” compared to other brands that vie for the same smartphone market and the company’s latest quarterly results show a similar pattern emerging once again.

Canalys Research analyst Runar Bjorhovde said, “Apple in that sense has a certain robustness that will allow it to be impacted less than many of its competitors.”

Apple offered some caution.

Maestri also warned that the horrible state of the economy is hurting sales of advertising, accessories, and home products. “Fortunately, we have a very broad portfolio, so we know we’re going to be able to navigate that,” he added.

The results show Apple’s advertising business, which includes selling ads alongside news articles and app store search results, is vulnerable to marketing cuts just the same as rivals Snap Inc and Meta Platforms Inc.

As for hardware parts shortages, this is still a big problem for the Mac and iPad product lines even though Maestri believes the impact is easing. They cost Apple under US$4 billion in the quarter ended June 25, which is less than it had forecast. Maestri said the company expects the hit to decline even further in the current quarter.

However, the tech giant risks joining its rivals in amassing an unsellable stockpile of tablets and computers if more consumers than expected decide not to make purchases due to the rising state of inflation and interest rates globally.

“In terms of testing the demand, you can’t really test the demand unless you have the supply,” Apple Chief Executive Tim Cook told analysts on Thursday. “And we were so far from that last quarter that we have an estimate of what we believe demand was. But it is an estimate.”

Citing the economic uncertainty, Apple said it was not providing specific revenue guidance. But it said sales compared to a year ago should rise faster in the current quarter than the 2% growth it posted in the just-ended quarter.

Apple also added that the quarterly sales and profit were US$83 billion and US$1.20 per share, which is above the estimates of US$82.8 billion and US$1.16 per share, according to Refinitiv data.

The US dollar is on the rise and has caused a lot of problems for many companies across the globe including Apple which generate substantial foreign revenue and is getting cash back when those currencies are converted.

Apple said currency fluctuations slashed sales by 3% in the June quarter and would crimp them by 6% in the current quarter. Another big problem is the fact that the company had to shut down operations in Russia earlier this year due to the war in Ukraine all of which has hurt the company’s sales.

With the current economic climate, Apple has slowed its hiring process and cut costs. The company’s chief executive, Tim Cook on Thursday said the company was being more deliberate in hiring in recognition of the realities of the environment.

Another recent setback to the economy is the supply chain disruption which has hit the production of many Apple products including the iPads and Macs due to their assembly locations being clustered near regions of China that went into COVID lockdowns.

While sales of iPhones and iPads topped expectations, revenue from services, Mac computers, and accessories missed Wall Street targets, and sales in the important China market where purchasing power fell by 1% as consumers were on lockdown thereby limiting sales.

Apple also is confronting slow overall economic growth in China, where its fiscal third-quarter sales were $14.6 billion.

On the other hand, the company’s services business which has added a boost to sales and profits of the business in recent years, was 12%, right below the previous year’s 33% rate resulting in US$19.6 billion in revenue, below the estimated US$19.7 billion.

Apple said it now has 860 million paying subscribers to its services, up from the previous quarter’s 825 million.

Sales of both iPads and Macs were US$7.2 billion and US$7.4 billion unlike the estimates of US$6.9 billion and US$8.7 billion. Mac sales represented a 10% contraction after record sales since 2020, first from a work-from-home boost and then from Apple’s new proprietary processor chips.

Its shares closed Thursday down about 11% so far this year, slightly less than the broader S&P 500 index and also less than other consumer hardware makers such as Sonos Inc and Samsung Electronics Co, the only company that sells more smartphones than Apple.