Apple cuts sales expectations following China tariffs

Apple cuts sales expectations following China tariffs

Apple cuts sales expectations following China tariffs

Apple announced a lower-than-expected guidance for the upcoming quarterly report.

Cook said other factors will also pull down Apple's revenue, including the timing of its iPhone launches past year and a strong dollar that means lower revenues when converted to USA currency.

"In fact, categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow nearly 19 per cent year-over-year".

Apple now expects revenue of $84bn (€74bn) for the fiscal quarter running from October through December.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China", Cook wrote in his letter.

Apple also reported that their installed base of active devices hit an all-time high this year, "growing by more than 100 million units in 12 months".

However, the company's woes in China have been exacerbated by a court decision that could potentially ban iPhone sales in the country.

"Obviously China is a bit of a closed shop when it comes to information, so when you get a credible company like Apple saying that things are going a bit slower than expected, then that does make people a bit nervous about what's happening", he said.

China's economy grew at its weakest pace since the financial crisis last quarter as its trade war with the USA added uncertainty to an already rocky environment. For Apple, this quarter actually ended on December 29, 2018.

In light of the revised guidance, Tim Cook sent a memo to Apple employees.

The Dow dropped 600 points, or 2.6 percent, to 22,745 in early trading Thursday. Apple's stock fell another 7.5 percent in after-hours trading Wednesday following the announcement.

Cook also spoke of "rising trade tensions with the United States" which has seen Apple become the target of a boycott campaign by prominent Chinese companies, something which has escalated more when Huawei's CFO was arrested in Canada. Others are simply taking advantage of cheap new plan for replacing iPhone batteries, which cut the price from 429 to $79. "Apple is an enormous revenue and profit generator, and will remain so for years to come". While that sounds alright in theory, we can't help but think Apple should try a bit harder, perhaps even shift to focus on services more.

In a note to investors, Apple CEO, Tim Cook, revealed that the company was revising its estimates for end-of-year income.

Twitter has met Apple's troubles with derision, with many pointing out that new models are massively overpriced while hardly being technological breakthroughs.

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