Apple sees significant slump in iPhone sales

Marco Green
January 12, 2019

Apple on Wednesday cut the revenue forecast for its latest quarter, citing fewer iPhone upgrades and weak sales in China, and its shares tumbled in after-hours trade.

Apple has been an absolute juggernaut in terms of sales, growth, revenue, and profit for shareholders.

Customers look at new Apple watches including the Series 4 at an Apple store in NY on September 21, 2018. President Donald Trump has also raised new tensions between the US and China by imposing tariffs on more than $200 billion in goods, although so far the iPhone hasn't been affected directly.

Apple now expects revenue of 84 billion dollars for the quarter spanning from October through December.

He also pointed to a lower than expected number of iPhone upgrades in some developed markets and said the tech firm had launched an initiative to make it easier to trade in handsets in stores, finance the purchase over time, and get help transferring data.

Cook also told CNBC that the company's products had not been targeted by the Chinese government, though some consumers may have chosen another brand due to the fact that Apple is an American company.

Apple shares, which had been halted ahead of the announcement, skidded 7.7 percent in after-hours trade, dragging the company's market value below $700 billion. And after several component makers in November forecast weaker-than-expected sales, some market watchers called the peak for iPhones in several key markets.

In a letter to investors, Cook blamed a "challenging quarter" on softening emerging markets, mainly China, and poor iPhone sales. But Cook specifically said he "would not put China in that category" of countries with troubled growth.

Apple is now the highest-profile multinational corporation to warn that the economic slowdown in China could hurt its business.

Apple has a big China problem, and it's making investors very nervous.

While President Donald Trump's trade war with China isn't helping Apple and other US technology companies, Ives believes Apple miscalculated by continuing to roll out high-priced phones in China, creating an opening for rivals with less costly alternatives that still worked well. He pointed in part to "rising trade tensions" with the United States.

The stark acknowledgment from the premier US tech company is sending reverberations throughout global markets and even led Citi to ask an existential question: "What if China Sales Went to Zero?"

Cook said that lower than anticipated iPhone sales, primarily in Greater China, accounted for all of the company's revenue shortfall compared to previous guidance.

Other reports by Click Lancashire

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