With a total stake of some $133 billion, Apple (AAPL -2.19%) makes up some 40% of Warren Buffett's stock portfolio. Thus, how the iPhone fares from year to year matters to Berkshire Hathaway (BRK.A -0.59%) (BRK.B -0.74%) shareholders as much as it does to Apple's. Big tech earnings have had a rough go of it for the third quarter of calendar year 2022, but Apple is doing just fine. It reported solid results in spite of mounting worry that iPhone and other consumer electronic sales were going to slide, but that didn't happen.  

Apple proved once again that the typically tech-averse Buffett made the right big tech stock bet.

Not a sizzling growth story, but that's ok

Buffett and company hate flashy and trendy investments, which often steers him clear of tech stocks in general. But Apple is a giant exception to the nonagenarian's rule. Apple is tech, but it has also built an incredible empire that keeps climbing at a slower-but-steady pace -- exactly the type of investment Berkshire Hathaway prefers. 

Apple just put the final wrap on its 2022 fiscal year (which corresponds to the end of the third quarter of calendar year 2022). In fiscal Q4, Apple said revenue increased 8% year-over-year to $90.1 billion. This was driven by a nearly 10% year-over-year increase in iPhone sales ($42.6 billion, or 47% of total revenue) in the quarter. Mac sales also jumped 25% year-over-year to $11.5 billion (13% of revenue) as more supply helped meet consumer demand that was being limited earlier this year and last.

Throughout September and October, media headlines racked up clicks reporting that iPhone production was getting cut. This caused worry that Apple was going to be plagued with the same smartphone and PC slowdown as other tech companies have been reporting. Suffice to say that didn't happen (though iPad sales did slip 13%, but tablets are only 8% of revenue these days).

How is the iPhone doing it?

It seems that those iPhone production cuts were simply a reduction in production output increases. iPhone demand is plenty strong right now, especially as it increases in popularity in emerging markets like India, Vietnam, Indonesia, and Mexico. As consumers in these markets accumulate wealth, it seems a shiny new Apple product is the pinnacle of attaining a slice of American affluence.

Of course, iPhone 14 prices were hiked in some markets (but not the U.S.), and that no doubt is helping keep revenues on the rise. Nevertheless, same as last quarter, CEO Tim Cook and the top team continue to report consumers are eating the premium phone prices and keep buying.

The dollar is one glaring issue to be mindful of

All was not perfect, though, and a single external factor is throttling Apple's strength: the inexorable rise of the U.S. dollar. A side-effect of the U.S. Federal Reserve's historic interest rate hikes, the dollar has strengthened against other currencies by a double-digit percentage this year. When companies like Apple make an overseas sale and then convert it back into dollars, that reduces reported growth.  

Specifically, Apple CFO Luca Maestri said 8% total revenue growth would have been six percentage points higher (or 14%) in the last quarter if not for this exchange rate headwind.

King Dollar will take a bigger toll to kick off Apple's first quarter of 2023 (which ends in December 2022). Maestri said overall revenue growth will decelerate from the 8% just reported primarily because of a nearly 10 percentage point expected impact from currency exchange.  

This will have an even bigger drag on operating profit. In the just reported quarter, earnings per share grew 4% year-over-year, lower than the pace revenue increased. This is because once weakened overseas currency is brought back to Apple's home in the states, it's also expensed in stronger dollars as well, causing a headwind for profit margins.

At any rate, Apple is still forecasting gradual expansion, and eventually a strong dollar will cool off -- and maybe even give back a little ground to other currencies, which would be a revenue and profit benefit to Apple. The iPhone company isn't setting the world ablaze with massive growth numbers. However, in light of the negativity out there on the state of the world economy, that's totally fine. I'm sure Buffett himself is pleased. 

Apple stock trades for just shy of 24 times fiscal 2022 earnings as of this writing. If you believe Apple can keep cranking out an average high-single-digit earnings per share increase each year through the rest of the 2020s, it's a fair premium to pay for this relative "safe-haven" Buffett stock.