Apple CEO Tim Cook: 'Everybody's seeing inflationary pressure'

3 months ago

Apple CEO Tim Cook attends the expansive opening lawsuit of the caller Apple store astatine The Grove connected November 19, 2021 successful Los Angeles, California.

Mario Tama | Getty Images

Apple CEO Tim Cook said the institution is seeing inflationary unit successful an interrogation with CNBC's Julia Boorstin connected Thursday arsenic the institution reported astir $124 cardinal successful sales successful its December quarter.

"We effort to terms our products for the worth that we present and we are seeing inflationary pressure," Cook said. "I deliberation everybody's seeing inflationary pressure. There's nary 2 ways astir that."

The reflection from the caput of the country's astir invaluable institution comes arsenic the Biden medication and Federal Reserve grapple with questions astir however to tame elevated ostentation and whether to rise involvement rates.

The user terms index, an metric measuring terms increases crossed a handbasket of user goods, rose 7% successful December from a twelvemonth earlier, its fastest yearly gait successful astir 40 years.

On a net telephone with analysts, Cook expanded connected however ostentation is affecting Apple's concern and gave an illustration of shipping costs.

"We're seeing ostentation and it's factored into our gross borderline and opex that [Apple CFO] Luca [Maestri] reviewed with you earlier," Cook said. "Logistics, arsenic I've mentioned connected a erstwhile call, is precise elevated successful presumption of the outgo of moving things around."

Cook said that helium hoped the accrued costs would beryllium temporary.

"I would anticipation that astatine slightest a information of that is transitory, but the satellite has changed and we'll see," Cook said.

Inflation hasn't wounded Apple's business, which reported rising gross margins successful the December quarter, and Apple hasn't raised prices successful effect to ostentation successful the United States. Cook didn't regularisation retired the anticipation of terms increases successful his interrogation with CNBC nor connected Apple's net call.

Cook besides said helium expects proviso concatenation constraints, which are contributing to inflation, to easiness for Apple successful the coming months.

In September, Nikkei Asia reported that spot prices were rising astatine TSMC, Apple's spot manufacturer, and that exertion companies could determine to walk the increases to customers. On Thursday, Cook said that "we're doing good connected the starring borderline stuff," referring to proviso of the processors that TSMC manufactures.

Apple doesn't often rise prices aft products are released, though it sometimes does truthful successful effect to determination economical conditions. For example, past year, Apple raised prices astatine its online Apple store successful Turkey arsenic the lira fell successful worth and ostentation successful the state hit a two-decade high.

However, Apple sometimes raises prices compared to past year's models erstwhile introducing caller iPhones and different devices successful the fall.