Apple shares drop after news of waning iPhone sales

Apple shares drop after news of waning iPhone sales

Any new product offering from Apple is unlikely to be revealed before September, when the company traditionally unveils its new iPhones.

The news sent Apple shares tumbling in after-hours trade and triggered a broader selloff in the stock market. The revenue revision, which came late Wednesday, led markets lower around the world and also triggered a slump for Asian suppliers and a wave of lower price targets from Wall Street.

Cook blamed the lowered forecast on several different factors, including the timing of its latest generation iPhone launches, a strong USA dollar creating foreign exchange headwinds, supply constraints, and economic weakness in some emerging markets.

Apple claimed a number of reasons why it knew revenue would underperform, citing a slowing economy in China, supply constraints, the build of buyers having upgraded to the iPhone X in January 2018 rather than December 2017 and more, but they were themselves surprised by how rapidly the smartphone market in China collapsed, saying "market data has shown that the contraction in Greater China's smartphone market has been particularly sharp". US stocks have tumbled over the last three months as investors anxious that the economy might slow down dramatically because of a variety of challenges including the trade dispute and rising interest rates.

Cook said the new iPhone models were released earlier than the flagship iPhone X last year, which created a hard year-over-year comparison.

Timing of the iPhone launches. China's economy has been pinched by the ongoing Sino-US trade war which is spilling over to other Asian economies. 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.

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Many analysts and investors had anxious 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.

"It's not going to be just Apple", CEA chairman Kevin Hassett said in an interview on CNN.

Stock markets jumped Friday as investors welcomed news of trade talks between the USA and China next week and the US government reported a big increase in hiring in December. Plus, he doesn't think the Apple decline is a push back to trade tensions. Mid-level officials from the Trump administration are scheduled to travel to Beijing for talks early next week. Apple estimated that it would make $91 billion over the last quarter, but has since revised this to $84 billion in revenue, with a gross margin of 38 percent.

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's decision to cut its sales outlook, "isn't a huge shock at this point", said Shannon Cross of Cross Research. When the suspension on selling was lifted, Apple shares fell 7.45%.

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