Expectations that Apple’s financials will report a quarterly revenue drop have been firmed up by Qualcomm’s poor financial performance revealed overnight.

Apple is expected to release its earnings in the next 24 hours and already the indications aren’t great.

Reuters reports that Apple is heading for its largest revenue drop since 2016 with a likely decrease of 1.6 percent in total quarterly revenue, although some analysts don’t agree with that prediction. Some say the revenue decline will be milder.

However, these are harder economic times with big tech not immune. “Apple is not immune to general macroeconomic trends,” Bob O’Donnell, founder of TECHnalysis Research told Reuters.

This isn’t the best time of the year financially for Apple in normal years with iPhone sales slowing as consumers hold out for a new generation iPhone around September-October.

But this isn’t a normal year and things could be worse as consumers stop buying new products altogether to save money.

There are already indications that Apple’s results won’t be stellar.

This week International Data Corporation (IDC) published that handset shipments were down 6.3 percent from 45.4 million to 42.5 million between Q2 and Q3. That includes iPhones.

There was some good news for Apple – its global market sharehad increased 0.2 percent from 15.8 to 16.0 percent over the quarter. But the overall market size was retracting.

Qualcomm’s earnings report today has further confirmed the present parlous state of the smartphone sales market. It said revenue from iPhone and Android chipset sales were down 25 percent in Q3 year-on-year, a figure that will include a significant drop of chipset sales to Apple.

( Apple has indicated moving away from Qualcomm and using its own modems, but not yet.)

The market too is bracing for poorer financials with Apple’s share price dropping 1.55 percent ahead of the earnings report. But Apple is full of surprises so we will have to wait and see.

iPhones sales are a good indication of Apple’s financial position as they represent more than 50 per cent of its revenue. In 2022 they brought in US$205.5 billion. (Figures: FourWeekMBA) But they don’t tell the entire story.

Under Tim Cook, Apple has been increasing revenue from services which in 2022 raked in US$78.13 billion. A rise in services revenue might soften the blow of handset sales’ losses. This would occur where consumers are willing to keep paying for monthly subscriptions.

Wearables (US$41.24 billion), Macs (US$40.18 billion) and iPads (US$29.3 billion) are smaller in overall revenue.