Apple cut its revenue forecasts for the key end of year quarter late Wednesday, citing the unforeseen "magnitude" of the economic slowdown in China. Cook also that Chinese consumers may have elected not to buy iPhones because Apple is an American company, instead opting to support the firm's Chinese competitors.
Apple isn't the only company facing difficulties in a slowing Chinese economy and escalating trade tensions. 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. Apple is also tasked with exploring how to more effectively break into market like India with a low-priced option.
Apple stopped disclosing unit sales reports for its phones in November, which Wall Street immediately took as the tech giant attempting to hide a downturn in sales.
"For a while now there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK", said Neil Wilson, chief markets analyst at Markets.com.
The tech giant has gone as far as assigning members of its marketing team to work full-time on boosting sales, and has upped the amount it is willing to pay for devices traded in toward the purchase of a new iPhone, according to a report earlier this month.
"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", Mr Cook wrote in the letter.
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Meanwhile, Durkin joined Activision Blizzard as CFO in 2012 and served in that role until around Neumann's hiring in 2017. Neumann received $9.47 million in total compensation during Activision Blizzard's most recent fiscal year.
The news caused Apple stock to trade sharply lower.
"Apple's challenge is very simple, to keep its meteoric growth going it either needs to drive more iPhone sales at an acceptable profit level, raise prices on the same or less iPhone units, or grow new product or service categories that more than fills the lack of iPhone profit growth dollars", Moorhead said. "We have underestimated the strength of the economic downturn, especially in China", wrote Tim Cook. Previously, Apple had expected to be 89 to 93 billion USA dollars.
Qualcomm, which requested the ban, said last month that the Fuzhou Intermediate People's Court ordered four Apple subsidiaries to stop selling older models of the iPhone, including the 7, 7 Plus, 8, and 8 Plus.
If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China.
Apple's problems in China may not be related to the economy alone. In pre-market trading, shares were also down about 9%. The iPhone is the most important Apple product and brought in around 60 percent of the total revenues. "Don't forget, Apple makes the product in China".
While President Trump's trade war with China isn't helping Apple and other USA technology companies, Ives believes Apple miscalculated by continuing to roll out high-priced phones in China, creating an opening for rivals with less costly alternatives that still worked well.