Apple Blames China’s Floundering Economy For Recent Dwindling Holiday Revenue

Apple Blames China’s Floundering Economy For Recent Dwindling Holiday Revenue

Apple's shares halted prior to the press release regarding the earnings guidance was sent out, with the value sitting at $157.92 United States dollars.

Apple's stock had fallen 32 per cent from an October peak to its close of US$157.92 on Wednesday amid growing concerns about the iPhone.

While we are disappointed to be falling short of our quarterly revenue goal, our fiscal first quarter was also a record setter for revenue from Services, Wearables and the Mac. iPad revenue grew double-digits over the year-ago quarter, and iPhone activations in the USA and Canada set new Christmas Day records.

Still, Mr Cook was careful to point out that smartphone sales overall in China have contracted.

But don't worry, the company has a plan for its future, one that anticipates fewer people buying iPhones and Apple shifting its business to new areas of growth like services (think: Apple Music subscriptions and whatnot).

CEO Tim Cook told investors that come January 29, the phone-flinger won't hit the revenue figures it said it would reach, and would in fact see its first year-over-year decline since 2016.

"We expected economic weakness in some emerging markets". "iPhone, in particular, was very strong double-digit growth there".

In a letter to investors on Wednesday, Apple's chief executive Tim Cook said China was central to Apple's sales problems. "For the moment, the market won't be able to differentiate between what's China-specific and what's Apple-related in China".




Apple lowered its revenue guidance for the first quarter ended December to US$84 billion, down from the US$89 to $93 billion it had previously projected.

Wearables grew by nearly 50 percent year-over-year, as Apple Watch and AirPods were wildly popular among holiday shoppers; launches of MacBook Air and Mac mini powered the Mac to year-over-year revenue growth and the launch of the new iPad Pro drove iPad to year-over-year double-digit revenue growth. Whichever way you look at it, that is still a big miss for a company like Apple.

Cook also acknowledged that consumers in other markets aren't buying as numerous latest iPhones, released last fall, as Apple had anticipated. Sales of Apple Watch Series 4 and iPad Pro were constrained much or all of the quarter.

Further, Apple expects a gross margin of about 38 percent, along with operating expenses of approximately $8.7 billion ($11.8 billion), according to a press release from the company.

The fact that Apple took the dramatic step of halting trading is an indication that the company was taken by surprise by the iPhone sales shortfall.

Apple acknowledged that demand for iPhones is waning, fulfilling the worst fears of investors concerned that the company's most profitable product has lost some of its luster.

Mr. Cook, Wall Street is likely looking to you and Apple for real New Year's resolutions here, and sooner rather than later.

Apple's weaker-than-expected performance is the latest evidence that the trade war could backfire on the USA, making it harder for President Trump to defend his assertion that long-term gains from imposing tariffs on China justify the short-term pain for consumers and investors. In his letter, the CEO said, "Apple innovates like no other company on earth, and we are not taking our foot off the gas".

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