Global financial markets felt the shockwaves as Apple shares logged their biggest intra-day percentage fall in six years, sending the company's stock market value to under $700 billion (554 billion pounds), well below its $1.1 trillion October peak.

After Apple's first revenue warning in nearly 12 years, investors also dumped chipmakers and tech stocks and flocked to perceived safe havens like U.S. Treasuries and the Japanese yen. [MKTS/GLOB] Developments in a patent dispute between Apple and Qualcomm in Germany also rattled investors.

A senior White House economic adviser said he expected trade uncertainty to hit earnings at many U.S. companies, but that sales at Apple and others with large exposure to China would recover once Washington and Beijing strike a trade deal.

"That is having an impact on earnings and it's not going to be just Apple," White House Chairman of the Council of Economic Advisers Kevin Hassett said in an interview with CNN.

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

Economic deceleration in China had caught Apple off guard and trade tensions between Washington and Beijing were starting to hurt consumer spending on smartphones in China, Apple Chief Executive Officer Tim Cook said on Wednesday.

Cook in November had cited slowing growth in emerging markets such as Brazil, India and Russia when Apple gave first-quarter sales estimates that were lower than expected. But he said then that he "would not put China in that category" of countries with troubled growth.

The China slowdown comes as Apple faces other obstacles in some of its biggest markets.

Qualcomm Inc said it had posted security bonds to enforce a court order banning sale of some iPhone models in Germany, meaning Apple would likely have to pull iPhone 7 and 8 models from its 15 stores in the country.

The German case, part of a global patent spat between the two companies, is Qualcomm's third major effort to secure a ban on iPhones over patent-infringement allegations after similar moves in the United States and China.

Wall Street analysts scrambled to cut their price targets on Apple, with at least 27 lowering their estimates. The current median price target is $186.

Shares of U.S.-based Apple suppliers and chipmakers including Cirrus Logic Inc, Skyworks Solutions Inc, Analog Devices, Broadcom Inc, NXP Semiconductors NV and Micron Technology Inc all tumbled.

Many analysts and investors had worried about a slowdown in iPhone sales since the company said in November it would stop disclosing unit sales data for its phones and other hardware products.

Apple's latest comments fuelled worries that its relatively high-priced devices may be falling out of favour in China, where rivals such as Huawei Technologies Co Ltd [HWT.UL] offer cheaper options.

Peter Richardson, a research director at Hong Kong-based Counterpoint Research, said it was difficult to see a catalyst that would help Apple recover lost ground in China.

"Until it changes this pricing strategy, it is unlikely to see market share growth and will most likely see a gradual contraction as iPhone users upgrade at slower rates," said Richardson.

Apple on Wednesday lowered its revenue forecast to $84 billion for its first quarter ended Dec. 29, below analysts' estimate of $88.05 billion. Apple originally forecast revenue of between $89 billion and $93 billion.

Apple shares were down 9.8 percent at $142.40. The stock has fallen about 30 percent since Cook said in November that the company may miss its holiday quarter sales estimate.</s>Apple Inc on Wednesday cut its sales forecast for its latest quarter, with Chief Executive Tim Cook blaming slowing iPhone sales in China, whose economy has been dragged down by uncertainty around U.S.-China trade relations.

REUTERS: Apple Inc on Wednesday took the rare step of cutting its quarterly sales forecast, with Chief Executive Tim Cook blaming slowing iPhone sales in China, whose economy has been dragged down by uncertainty around U.S.-China trade relations.

The news sent Apple shares tumbling in after-hours trade and triggered a broader selloff in the stock market.

The revenue cut for the just-ended quarter raises questions about whether Apple, the face of American business in many parts of the world, is being punished by Chinese officials or consumers in favour of local rivals such as Huawei Technology Cos Ltd, whose pricey smart phones compete with the iPhone and which has been under discussion by the Trump administration for a possible sales ban over suggestions that its telecommunications equipment could be used to spy on Americans.

Cook told CNBC that Apple products have not been targeted by the Chinese government, though some consumers may have elected not to buy an iPhone or other Apple device because it is an American company.

“The much larger issue is the slowing of the (Chinese) economy, and then the trade tension that has further pressured it,” Cook said.

Some analysts, however, questioned the impact of Apple's own actions, such as its unyielding pursuit of high selling prices for its products.

Apple on Wednesday lowered its forecast to US$84 billion in revenue for its fiscal first quarter ended Dec. 29, below analysts' estimate of US$91.5 billion, according to IBES data from Refinitiv. Apple originally forecast revenue of between US$89 billion and US$93 billion.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Cook said in a letter to investors. "In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."

Wednesday was the first time that Apple issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007.

Apple shares skidded 7.7 percent in after-hours trade, dragging the company's market value below US$700 billion. In the broader market, the S&P 500 futures fell 1.5 percent. In the U.S. government bond market, a typical safe-haven, the yield on the benchmark 10- year, which moves inversely to the bond's price, sank to an 11-month low.

Apple's move was not entirely a surprise. In November, the Cupertino, California-based company said it would quit disclosing unit sales data for iPhones and other hardware items, leading many analysts to worry that a drop in iPhone sales was coming. And after several component makers in November forecast weaker-than-expected sales, some market watchers called the peak for iPhones in several key markets.

In November, Cook cited slowing growth in emerging markets such as Brazil, India and Russia for a lower-than-anticipated sales estimates for the company's fiscal first quarter. But Cook specifically said he "would not put China in that category" of countries with troubled growth.

That all came before the damage to the Chinese economy from trade tensions with the United States and long-simmering structural issues became evident.

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 all previously said they planned to cut production in the country.

But Apple has held firm on its premium pricing strategy in China despite the risk of a slower economy.

"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.

In the latest fiscal year, ended Sept. 29, unit sales of the iPhone were essentially flat from the prior year, while iPhone revenue expanded 18 percent to US$166.7 billion. That growth came entirely from higher prices.

Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Cook's comments on the impact of the U.S. trade tensions with China "might be a dig at (U.S. President Donald) Trump, but mostly he may be using the trade turmoil as an excuse for some missteps they’ve made over the last year."

But some investors were heartened by Apple's plans on using its cash pile.

In his letter, Cook said Apple has US$130 billion in net cash and that it intends to continue its efforts to reduce that cash balance to net zero, which the company has so far accomplished through dividend increases and share buybacks.

"We would anticipate the company increasing share buybacks on the weakness to return capital to shareholders at discount prices," said Trip Miller, managing partner at Apple shareholder Gullane Capital Partners.</s>When Apple issues a profit warning, you know something’s up.

The tech company did just that on Wednesday, with CEO Tim Cook citing a slew of factors weighing heavily on its business during the holiday quarter and heading into 2019.

The bottom line is that Apple is currently selling fewer phones than it expected, prompting the company to revise down its sales forecasts for the final three months of 2018.

In a letter to investors that spooked the market and wiped $55 billion off the value of the tech colossus, Cook suggested the company may have missed as much as $9 billion in sales for the quarter. This, he said, was the result of pressure on the global economy and Apple’s failure to “foresee the magnitude of the economic deceleration, particularly in Greater China. ”

The CEO said, “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

It was Cook’s view that “the economic environment in China has been further impacted by rising trade tensions with the United States,” a reference to the ongoing trade war between the U.S. and China.

He continued: “As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed,” adding that market data revealed the contraction in China’s smartphone market has been “particularly sharp.”

Weaker-than-expected demand for iPhone upgrades in developing markets was also cited as a factor, as was a strong U.S. dollar and an earlier launch timing of the iPhone XS and XS Max compared to the iPhone X. Cook’s letter also pointed to “customers taking advantage of significantly reduced pricing for iPhone battery replacements,” a service that Apple launched in 2018 but which ended on December 31.

Interestingly, in his letter Cook declined to mention the rise of Chinese rivals as a reason for the squeeze on iPhone sales. Huawei, for example, sold 200 million phones (includes sister brand Honor) in 2018, making it the world’s second biggest smartphone manufacturer after Samsung. Apple sits in third spot.

Keen not to leave investors feeling too gloomy, the CEO said that despite the current difficulties, Apple’s business in China “has a bright future,” insisting that the company’s products “enjoy a strong following among customers, with a very high level of engagement and satisfaction.”

Apple’s profit warning is the first from the company in 16 years, and its first since the launch of the iPhone in 2007. But the with sales of $84 billion still expected — revised down from between $89 billion and $94 billion — few will view the current situation as a crisis for the tech firm.

In any case, its current struggles reflect the growing challenge faced by smartphone makers around the world after reports toward the end of 2018 highlighted a 6 percent drop in handset sales globally, with China again cited as one of the primary factors in the fall.</s>(Reuters) - Apple Inc (AAPL.O) shares plunged 10 percent on Thursday after the iPhone maker blamed weak China demand for a holiday-quarter revenue shortfall, with many investors worried the rare stumble was a harbinger for slowing global growth.

Global financial markets felt the shockwaves as Apple shares logged their biggest intra-day percentage fall in six years, sending the company’s stock market value to under $700 billion, well below its $1.1 trillion October peak.

After Apple’s first revenue warning in nearly 12 years, investors also dumped chipmakers and tech stocks and flocked to perceived safe havens like U.S. Treasuries and the Japanese yen. [MKTS/GLOB] Developments in a patent dispute between Apple and Qualcomm in Germany also rattled investors.

A senior White House economic adviser said he expected trade uncertainty to hit earnings at many U.S. companies, but that sales at Apple and others with large exposure to China would recover once Washington and Beijing strike a trade deal.

“That is having an impact on earnings and it’s not going to be just Apple,” White House Chairman of the Council of Economic Advisers Kevin Hassett said in an interview with CNN.

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

Economic deceleration in China had caught Apple off guard and trade tensions between Washington and Beijing were starting to hurt consumer spending on smartphones in China, Apple Chief Executive Officer Tim Cook said on Wednesday.

Cook in November had cited slowing growth in emerging markets such as Brazil, India and Russia when Apple gave first-quarter sales estimates that were lower than expected. But he said then that he “would not put China in that category” of countries with troubled growth.

The China slowdown comes as Apple faces other obstacles in some of its biggest markets.

Qualcomm Inc (QCOM.O) said it had posted security bonds to enforce a court order banning sale of some iPhone models in Germany, meaning Apple would likely have to pull iPhone 7 and 8 models from its 15 stores in the country.

The German case, part of a global patent spat between the two companies, is Qualcomm’s third major effort to secure a ban on iPhones over patent-infringement allegations after similar moves in the United States and China.

Wall Street analysts scrambled to cut their price targets on Apple, with at least 27 lowering their estimates. The current median price target is $186.

Shares of U.S.-based Apple suppliers and chipmakers including Cirrus Logic Inc (CRUS.O), Skyworks Solutions Inc (SWKS.O), Analog Devices (ADI.O), Broadcom Inc (AVGO.O), NXP Semiconductors NV (NXPI.O) and Micron Technology Inc (MU.O) all tumbled.

Many analysts and investors had worried about a slowdown in iPhone sales since the company said in November it would stop disclosing unit sales data for its phones and other hardware products.

Apple’s latest comments fuelled worries that its relatively high-priced devices may be falling out of favour in China, where rivals such as Huawei Technologies Co Ltd [HWT.UL] offer cheaper options.

Peter Richardson, a research director at Hong Kong-based Counterpoint Research, said it was difficult to see a catalyst that would help Apple recover lost ground in China.

“Until it changes this pricing strategy, it is unlikely to see market share growth and will most likely see a gradual contraction as iPhone users upgrade at slower rates,” said Richardson.

Apple on Wednesday lowered its revenue forecast to $84 billion for its first quarter ended Dec. 29, below analysts’ estimate of $88.05 billion. Apple originally forecast revenue of between $89 billion and $93 billion.

Apple shares were down 9.8 percent at $142.40. The stock has fallen about 30 percent since Cook said in November that the company may miss its holiday quarter sales estimate.</s>Apple on Wednesday lowered quarterly sales estimates for the first-time in more than 15 years, blaming an unexpectedly deep slowdown in China and President Donald Trump's trade war for the shortfall.

The announcement suggested not just significant business challenges emerging for Apple, which briefly became the most valuable U.S. company in history last year, but deeper concern about how the trade war might be contributing to a global economic slowdown led by China.

Apple chief executive Tim Cook said in a letter to investors that Apple "did not foresee the magnitude of the economic deterioration" in Greater China, an area that includes China, Hong Kong and Taiwan. Along with slowed growth there in the second half of last year, Cook said that the "economic environment in China has been further impacted by rising trade tensions with the United States."

The announcement seems likely to fuel further volatility in the U.S. stock market, where U.S. technology stocks have driven a major correction in recent months. The news Wednesday sent Apple's stock - as well as the broader market - plunging in after-hours trading.

It also comes as the Trump administration and the Chinese are trying - without success - to resolve a simmering trade conflict that has already put nearly half of all Chinese exports to the United States under tariff.

Apple is perhaps the most prominent U.S. company to cite the trade war as a factor dragging down its business.

But a variety of other issues could also be at play that raise questions about the long-term challenges facing the iPhone, Apple's flagship product. Consumers may be holding on to the devices longer in China and other markets, while Chinese consumers may also be gravitating toward cheaper alternatives made by Chinese companies such as Huawei.

Greater China accounted for one fifth of Apple's roughly $265 billion in global sales in the last fiscal year. That makes Greater China the third-largest market for Apple, although Cook at one point in 2013 said he expected it to "become our first."

"Apple is in a lot of trouble," said Shaun Rein, managing director at the China Market Research Group in Shanghai.

Along with being the world's most populous country, China also serves as a key hub in the tech giant's supply chain - a place where iPhones are assembled.

Many signs have been pointing to the slowing of China's economy. The International Monetary Fund predicts China's economy will grow at 6.2 percent next year, down from 6.9 percent in 2017, but some analysts say the decline will be even more dramatic.

Apple's warning suggests one way that the slowdown could reach the United States. China has the second-largest economy in the world and is the third-largest buyer of U.S. exports after Mexico and Canada, meaning that what happens can quickly affect U.S. growth and employment.

"There's massive uncertainty because of the trade war. We're seeing the weakest retail sales in years," Rein said of China's economy.

A number of other prominent companies, including Ford, Walmart, United Technologies and Honeywell, have cited the trade war as hitting their businesses. But while most of these companies have been hurt because they have to pay more to import products, Apple's situation is more complex.

Cook personally lobbied Trump for months to spare his company from tariffs targeting products imported from China and expressed optimism that the trade war's impacts would prove modest.

But it is feeling the effects now because the trade war has slowed China's economy so much that Chinese consumers are buying fewer smartphones.

"Trump really does think tariffs are a good thing, and that's scary for the economy," said Phil Levy, a former economist in the George W. Bush administration. "Companies thought tariffs would just be temporary. Now it's dawning on them that's not the case and they have to react."

Trump has previously threatened to place hefty tariffs on all Chinese products coming into the country - including iPhones - if Beijing doesn't make a deal by early March.

With Apple's stock falling more than 7 percent in after-hours trading, investors Thursday will likely be asking if this is a preview of what other technology, retail, auto and manufacturing companies are facing.

Apple is no longer the most valuable company in the United States. It now trails Microsoft and Amazon. Some analysts say Apple is getting hurt in China as consumers there prefer to buy Huawei phones, a top Chinese brand.

The company lowered its revenue guidance to $84 billion, compared with its previous revenue estimate of between $89 billion and $93 billion. The news halted trading of Apple's stock late Wednesday and comes as Apple is set to unveil final earnings at the end of January.

Apple's revision to its revenue estimates is "probably the most significant one they've ever done," said Ben Bajarin, a tech analyst at Creative Strategies, who said Apple last made such an adjustment in 2002 in the early days of the iPod music player.

Along with its troubles in China, Bajarin said Apple's new miss also reflected a change in how consumers are purchasing the company's devices around the world. Consumers aren't springing to buy Apple's newer, faster, pricier iPhones as soon as they hit the market, he said.

"It's happening in every major market, not just the U.S. They're being hit by consumers holding on to these devices and not feeling the need to upgrade," Bajarin said.</s>Apple Inc on Wednesday cut its sales forecast for its latest quarter, with Chief Executive Tim Cook blaming slowing iPhone sales in China, whose economy has been dragged down by uncertainty around U.S.-China trade relations.

REUTERS: Apple Inc on Wednesday took the rare step of cutting its quarterly sales forecast, with Chief Executive Tim Cook blaming slowing iPhone sales in China, whose economy has been dragged down by uncertainty around U.S.-China trade relations.

The news sent Apple shares tumbling in after-hours trade and triggered a broader selloff in the stock market.

The revenue cut for the just-ended quarter raises questions about whether Apple, the face of American business in many parts of the world, is being punished by Chinese officials or consumers in favour of local rivals such as Huawei Technology Cos Ltd, whose pricey smart phones compete with the iPhone and which has been under discussion by the Trump administration for a possible sales ban over suggestions that its telecommunications equipment could be used to spy on Americans.

Cook told CNBC that Apple products have not been targeted by the Chinese government, though some consumers may have elected not to buy an iPhone or other Apple device because it is an American company.

“The much larger issue is the slowing of the (Chinese) economy, and then the trade tension that has further pressured it,” Cook said.

Some analysts, however, questioned the impact of Apple's own actions, such as its unyielding pursuit of high selling prices for its products.

Apple on Wednesday lowered its forecast to US$84 billion in revenue for its fiscal first quarter ended Dec. 29, below analysts' estimate of US$91.5 billion, according to IBES data from Refinitiv. Apple originally forecast revenue of between US$89 billion and US$93 billion.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Cook said in a letter to investors. "In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."

Wednesday was the first time that Apple issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007.

Apple shares skidded 7.7 percent in after-hours trade, dragging the company's market value below US$700 billion. In the broader market, the S&P 500 futures fell 1.5 percent. In the U.S. government bond market, a typical safe-haven, the yield on the benchmark 10- year, which moves inversely to the bond's price, sank to an 11-month low.

Apple's move was not entirely a surprise. In November, the Cupertino, California-based company said it would quit disclosing unit sales data for iPhones and other hardware items, leading many analysts to worry that a drop in iPhone sales was coming. And after several component makers in November forecast weaker-than-expected sales, some market watchers called the peak for iPhones in several key markets.

In November, Cook cited slowing growth in emerging markets such as Brazil, India and Russia for a lower-than-anticipated sales estimates for the company's fiscal first quarter. But Cook specifically said he "would not put China in that category" of countries with troubled growth.

That all came before the damage to the Chinese economy from trade tensions with the United States and long-simmering structural issues became evident.

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 all previously said they planned to cut production in the country.

But Apple has held firm on its premium pricing strategy in China despite the risk of a slower economy.

"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.

In the latest fiscal year, ended Sept. 29, unit sales of the iPhone were essentially flat from the prior year, while iPhone revenue expanded 18 percent to US$166.7 billion. That growth came entirely from higher prices.

Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Cook's comments on the impact of the U.S. trade tensions with China "might be a dig at (U.S. President Donald) Trump, but mostly he may be using the trade turmoil as an excuse for some missteps they’ve made over the last year."

But some investors were heartened by Apple's plans on using its cash pile.

In his letter, Cook said Apple has US$130 billion in net cash and that it intends to continue its efforts to reduce that cash balance to net zero, which the company has so far accomplished through dividend increases and share buybacks.

"We would anticipate the company increasing share buybacks on the weakness to return capital to shareholders at discount prices," said Trip Miller, managing partner at Apple shareholder Gullane Capital Partners.</s>SAN FRANCISCO — Apple warns that disappointing iPhone sales will cause a significant drop in its revenue over the crucial holiday season compared to earlier projections.

CEO Tim Cook made the announcement after the market closed Wednesday. It embodies some of the worst fears of investors, who have been dumping Apple shares amid signs that the latest iPhone models weren’t living up to expectations.
• China has banned sales of Apple iPhones 6 through X in Qualcomm patent dispute
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Cook cited China as Apple’s biggest weak spot, but also said that consumers weren’t upgrading to the latest iPhones models as eagerly as anticipated.

As a result, Apple now expects revenue of US$84 billion for the fiscal quarter running from October through December. Management had previously predicted revenue ranging from US$89 billion to US$93 billion.</s>Apple Inc on Wednesday cut the revenue forecast for its latest quarter, citing fewer iPhone upgrades and weak sales in China, and its shares tumbled in after-hours trade.

The company forecast $84 billion in revenue for its fiscal first quarter ended Dec. 29, which is below analysts` estimate of $91.5 billion, according to IBES data from Refinitiv. Apple originally forecast revenue of between $89 billion and $93 billion.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Chief Executive Officer Tim Cook said in a letter to investors. "In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."

Wednesday was the first time that Apple issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007.

Apple shares, which had been halted ahead of the announcement, skidded 7.7 percent in after-hours trade, dragging the company`s market value below $700 billion.

A slew of brokerages reduced their first-quarter production estimates for iPhones after several component makers in November forecast weaker-than-expected sales, leading some market watchers to call the peak for iPhones in several key markets.

On Apple's earnings call in November, Cook cited slowing growth in emerging markets such as Brazil, India and Russia for the lower-than-anticipated sales estimates for the company`s fiscal first quarter. But Cook specifically said he "would not put China in that category" of countries with troubled growth.

That all came before the damage to the Chinese economy from trade tensions with the United States became clear. On Wednesday, China`s central bank magazine said the country`s economic growth could fall below 6.5 percent in the fourth quarter as companies face increased difficulties there.

Apple has held firm on its premium pricing strategy in China despite the risk of a slower economy, a factor that has been exacerbated by the strong US dollar. Apple tends to set its prices in US dollars and charge a broadly equivalent amount in local currencies.

"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.</s>Apple chief Tim Cook slashed the tech giant’s projections for Q1 2019 revenue in a letter to shareholders on Wednesday, blaming the cutback on a myriad of issues, including underwhelming iPhone sales in China.

Cook said Apple has lowered its revenue guidance to $84 billion for the upcoming quarter — a healthy decrease from the $89 billion to $93 billion the company had originally anticipated.

“Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline,” Cook wrote.

Also Read: Here Are the Top Podcasts of 2018 on Apple Podcasts

Cook added while iPhone sales have dropped, its other categories, including Services and Mac sales, have increased about 19 percent year-over-year.

China was a primary focus for Cook in his letter, with the chief executive pointing to “rising trade tensions with the United States,” as well as the country’s overall economic downturn during the second half of 2018.

“As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed,” Cook added. “And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp.”

Cook also warned new iPhone upgrades were “not as strong” as Apple expected in several countries.

Apple’s stock — which had already suffered a brutal stretch to close 2018 — fell nearly 7 percent in after-hours trading to $147 per share.

Read original story Apple Chief Tim Cook Blames Trade Tensions With China, Weak iPhone Sales for Lowered Revenue Projection At TheWrap</s>Apple CEO Tim Cook published a letter to investors today warning of weaker than expected first-quarter earnings, citing “fewer iPhone upgrades than we had anticipated.” The weakened demand came primarily from China, although Cook notes that “in some developed markets, iPhone upgrades also were not as strong as we thought they would be.”

People just aren’t buying as many new iPhones as Apple hoped

In his letter, Cook offers several explanations for the lower earnings guidance: earlier launch timing of the iPhone XS and XS Max compared to the iPhone X, the strength of the US dollar, supply constraints due to the number of new products Apple released in the fall, and overall economic weakness in some markets. But the core issue remains simple: people just aren’t buying as many new iPhones as Apple hoped.

EXCLUSIVE: After cutting Q1 expectations, Apple CEO Tim Cook tells CNBC that the shortfall is primarily in Greater China as trade tensions put pressure on the Chinese economy https://t.co/iOf79ebo17 pic.twitter.com/Lm7Wyp1VOX — CNBC Now (@CNBCnow) January 2, 2019

Per Cook’s letter, “Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline.” Cook notes that other divisions of Apple have actually risen by almost 19 percent year over year, but the truth remains that the iPhone has long been Apple’s core business, and if Apple can’t sell enough of them, the whole company struggles.

In an interview with CNBC, Cook elaborates on the shortfall, pointing out that “the trade tensions between the United States and China put additional pressure on their economy,” which resulted in fewer customers. But Cook also mentioned fewer carrier subsidiaries on new iPhones, as well as the dramatically lowered battery replacement price for older models (due to Apple’s iPhone slowdown drama from late 2017), as contributing factors.

All in all, Apple’s revised Q1 guidance forecast is dropping by up to $9 billion in revenue compared to its original estimate. Apple’s stock dropped by nearly 10 percent once trading resumed.
American electronics maker Apple warns that iPhone sales are slowing significantly and the product is in weak demand, blaming trade tensions with China. The company says that it has lowered its expected fiscal earnings for the first quarter as a result, citing disappointing holiday sales figures, and that it could lose $9 billion due to the decline.