Apple shares close almost 10% lower after sales warning

Apple shares close almost 10% lower after sales warning

It jacked up its prices in India past year after the government raised smartphone tariffs from 15% to 20%.

On this week's Tech Tent we explore whether Apple's chief executive was right to blame a slowdown in the Chinese economy for its problems or whether there are wider issues with the iPhone, the product which turned it into a trillion dollar company.

The beginning of 2019 isn't proving to be as fruitful as Apple anticipated.

But the idea was that as iPhone profits eased back they would be replaced by revenues from services - Apple Music, cloud storage and so on. Indeed, in fiscal 2018, the company derived $51.9 billion from the region - a whopping 20% of its total revenue.

He told CNN that China was "feeling the blow" of U.S. tariffs. The iPhone X, which debuted in 2017, was Apple's most expensive iPhone ever coming in at $999. iPhone prices continued to climb as the company debuted the XS and XS Max previous year, with the former starting at $1,099.

Cook also cited the trade war between the USA and China as another factor.

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

For now, shares of Apple suppliers were taking the biggest hits.

USA manufacturing PMI index falls to 15-month low in December
Uncertainties regarding Brexit disruption on supply chains and the exchange rate are also weighing on business confidence. There were reports from panellists of lower costs for items such as oil and paper.

The overall smartphone market didn't fare well in 2018. "So we saw as the quarter went on things like traffic in our retail stores, traffic in our channel partner stores, the reports of the smartphone industry contracting, particularly bad in November". First, as my colleague Evan Niu wrote about the smartphone market in December: "What little growth ... is left is being driven by low-priced handsets from Chinese vendors".

In his letter, Cook said Apple has $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. After all, Apple kicked off the program in December 2017.

Apple lowered its revenue forecast to $84 billion for its first quarter, below analysts' estimate of $88 billion.

The reason for that shortfall?

He said many companies have a lot of sales in China and will "be watching their earnings downgraded next year until we get a deal with China". Finally, BidaskClub cut shares of Apple from a "strong-buy" rating to a "buy" rating in a research report on Wednesday, September 12th. While we don't have the exact numbers, it's likely that many iPhone customers chose to pay the $30 to extend the life of their current handsets rather than shell out hundreds of dollars for a new model. Customers are often willing to pay a premium for a product offered by a company with a strong brand. The sell-off also came after a surprisingly weak report on US manufacturing. 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.

The firm also recently announced a quarterly dividend, which was paid on Thursday, November 15th.

"The question now is will Apple change its strategy or stick to its hubris", Ives said.

"Apple stock is now at a crossroads", said a research note Thursday from Gene Munster and Will Thompson of the investment firm Loup Ventures.

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