Apple shares sink as iPhone sales figures slashed

Roman Schwartz
January 7, 2019

Greater China, a region that includes the mainland, Hong Kong and Taiwan, accounted for most of the revenue shortfall, but iPhone upgrades also weren't as strong as the company anticipated in some developed markets, Cook said.

In a letter to investors, CEO Tim Cook blamed the disappointing outlook on China's ongoing trade war with the United States and a number of other factors, including the company offering cheaper iPhone battery replacements.

But Apple said its revenue miss in China was not due to the production side, but rather the sales side, since Chinese consumers are not buying enough iPhones.

Analysts and investors had been expecting a downturn in Apple's success for some time, after the company said it would stop disclosing unit sales data for its iPhones and other hardware products in November. The iPhone is Apple's biggest product. Some of the company's iPhones have passed the $1,000 mark while Chinese brands look to fill the mass market. He said, "Don't forget this, Apple makes their product in China, I told Tim Cook who is a friend of mine who I like a lot, make your product in the United States, build those attractive plants that go on for miles it seems".

Apple shares dropped nearly nine percent on Thursday, falling to their lowest amount since April 2017, the Wall Street Journal reported. "iPhone, in particular, was very strong double-digit growth there".

An advertisement for Huawei Mate 20 series is seen outside an Apple store, as customers queue before the store opens on the day the new iPhone XR goes on sale in Shanghai, China October 26, 2018.

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Apple's stock price was down 7 percent, to $146.90, in after-hours trading on Wednesday.

Chief executive officer (CEO), Tim Cook, noted in an interview that sluggish sales in China hurt iPhone purchase amounts overall. While this is still quite a large sum, the company expected to bring in revenue between $89 billion and $93 billion.

Apple's poor performance was echoed by its fello Faang companies - Facebook, Apple, Amazon, Netflix and Google - which all performed poorly in 2018.

He wrote: "most of our revenue shortfall and 100 per cent of our year-over-year worldwide revenue decline occurred in greater China across iPhone, Mac and iPad".

A key White House adviser said in response that the ongoing tensions were going to mean that a "heck of a lot" of U.S. firms with sales in China - not just Apple (Swiss: AAPL-EUR.SW - news) - would see their earnings downgraded until the two countries reach a deal.

Apple issued a rare revision to its earnings guidance earlier this week, cautioning investors that the company is anticipating to generate a few billion dollars less in revenue than initially expected. And a Shanghai-based business is reported to have said it would fire anyone who bought Apple products.

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