Tim Cook will host meeting for all Apple employees to talk iPhone

The new iPhone models that aren't being taken up

The new iPhone models that aren't being taken up

Apple's market share has dropped to 7.5% in the third quarter from 11.2% in the first quarter, while Huawei has been in the lead with an average market share of 25.5%, according to IDC.

In his assessment of Apple's outlook, Hall not only slashed his 12-month forecast for the company's stock (down to $140 per share from his previous estimates of $182 per share), but he also went even further, likening the iPhone-maker's struggles to those of Nokia - the now-defunct Finnish phone-maker whose devices once dominated the mobile market.

This marked the first time Apple had issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007. The S&P 500 gained 34 points, or 1.4 percent, to 2,482. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years.

Apple's move was not entirely a surprise. The Cupertino, Calif. -based company has seen its stock drop more than 30 percent as numerous parts and chip suppliers for the iPhone have slashed sales forecasts. With Apple suddenly launching several new products in the quarter-including iPhones, Apple Watches, and Macs-it experienced "supply constraints" that would "gate" (slow) sales of "certain products" during the quarter. 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.

Apple is now the highest-profile multinational corporation to warn that the economic slowdown in China could hurt its business. Automakers such as Ford Motor Co, Hyundai Motor Co and Nissan Motor Co Ltd all previously said they planned to cut production in the country. We may also see reduced iPhone prices, more emphasis on Apple's other products, and potentially a revised strategy that focuses less on the unpredictable China.

"The question for investors will be the extent to which Apple's aggressive pricing has exacerbated this situation and what this means for the company's longer-term pricing power within its iPhone franchise", James Cordwell, an analyst at Atlantic Equities, told Reuters.

Huawei recently announced that it shipped more than 200 million units a year ago.

Apple's first instance of revised earnings guidance since 2002 has the potential to rattle the financial markets as it puts the spotlight on China's woes and the dependence of the largest US companies on strong growth in the world's second-largest economy.

But some investors were heartened by Apple's plans on using its cash pile. "It is true that China has had a broad slowdown but the Apple weakness is more to due to company specific factors".

"I think there are a heck of a lot of US companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year".

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