Apple Shares Tumble After CEO Tim Cook Issues Revenue Downgrade

Apple Revises Q1 Guidance Citing Chinese Trade And iPhone Sales As Things That Suck

Nobody in China wants Apple's eye-wateringly priced iPhones, sighs CEO Tim Cook

Like at other consumer goods companies, the festive season is typically Apple's strongest quarter, but revenues of $84 billion would mark an nearly five percent fall from the same period last year and represent the firm's first year-on-year quarterly decline since 2016. Former CFTC commissioner Bart Chilton, host of "Boom Bust" joins Steve Malzberg to share his insights.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China", Apple's chief executive, Tim Cook, said in a letter to investors.

Apple's bombshell news - a sharply weaker revenue outlook and lower iPhone sales - has raised questions over the future of the California giant, which until recently had been seen as the undisputed innovation leader in the tech sector.

CEO Tim Cook blamed the slump on a slowing economy in China, where Apple has also faced competition from Huawei and Xiaomi. The company shares fell 7.7 per cent in after-hours trading, so Apple is now worth less than $700 billion.

If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China.

However, he added that developed markets saw troubles as well, as fewer customers than expected chose to upgrade to Apple's newest phones. "The trade tensions between the United States and China put additional pressure on their economy".

The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September a year ago to seize the No. 2 spot behind industry leader Samsung, according to the research firm International Data Corp. The truth remains that the iPhone has always been Apple's core business and if Apple can't sell enough of them, the whole company struggles.

However, the company's woes in China have been exacerbated by a court decision that could potentially ban iPhone sales in the country.

The CEO would go on to point to the ongoing trade war between China and the Trump administration as further hurting its sales, claiming that "mounting uncertainty" about the economy in China was keeping people out of its stores.

Apple said it now expects revenue of around $84bn, down from an earlier estimate of between $89bn and $93bn.

One thing Cook didn't mention in his letter is Apple's declining market share in China and the rise of domestic rivals like Huawei and Oppo. Apple said the smartphone market in China has been contracting, and that's true.

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