Rare walk-back from Apple weighs on USA markets

Rare walk-back from Apple weighs on USA markets

Today we are revising our guidance for Apple's fiscal 2019 first quarter, which ended on December 29.

President Donald Trump's trade war with China will force many US companies to join Apple Inc.in announcing lower than expected earnings, the chairman of the White House Council of Economic Advisers said.

A couple of factors have created the weak sales environment in China for the Apple iPhone, which led Apple to cut its guidance on fiscal first quarter revenue. In his letter, Cook said that more than 100% of the company's worldwide revenue decline was in China for sales of iPhones, Macs and iPads.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China", CEO Tim Cook said Wednesday in a letter to Apple investors.

Apple's plan to improve results, he said, consists of making it simpler to trade in a phone at Apple Stores, finance phone purchases over time, and get help transferring data from a current phone to a new phone, among other things.

KitGuru Says: I still like both the iPhone and the iPad but Apple's price increases over the last few years have been taking a toll.

Apple sits at the top of an vast food chain of tech companies that supply it from Europe, Asia and the US, and nearly all are being hit hard.

"The iOS developer community in China is among the most innovative, creative and vibrant in the world", he said. In late December, the promotional program for the new models went live in China, adding one major perk: users in China cannot only trade in their old iPhones, but also Android phones made by Apple's major competitors in China, including Huawei, OPPO and Xiaomi.

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

In light of the revised guidance, Tim Cook sent a memo to Apple employees. This in turn has caused shares to drop by more than 7 percent, essentially shaving off $55 billion from Apple's overall market value.

iPhone-maker Apple tells investors that it will miss revenue estimates by $9 billion owing to weak demand in Asia, especially China.

Add to that Android's growing dominance in markets like India, where iPhone's market share in 2018 declined to 1 percent - "its lowest in recent history" - Counterpoint Research estimated. China is Apple's third-largest market after the United States and Europe. Investors will be glad to hear Apple's expecting to report "a new all-time record for Apple's earnings per share".

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