Apple admits it is going to miss iPhone sales

Apple admits it is going to miss iPhone sales

Earlier in the day, Apple Chairman Tim Cook said in a letter to investors that an economic slump in China, plus U.S. trade tensions, have resulted in a drop in iPhone sales, forcing the company to downgrade earnings forecasts for the first quarter of 2019.

Halo Investing's Jason Barsema and BigEyedWish's Ian Wishingrad on Apple cutting its sales forecast due to a downturn in iPhone sales in China and the outlook for Amazon.

Wall Street did not take kindly to the news with Apple's shares tumbling 8% in after-hours trading to $145.15 a share after a momentary halt.

In an open letter to investors published last night, Apple cut its revenue forecast for the busy Christmas quarter by 7.8 per cent.

Apple Inc. plunged to its lowest price in a year-and-a-half after the company cut its revenue outlook for the first time in nearly two decades, citing weaker demand in China.

To boost iPhone sales, Apple launched a "GiveBack" trade-in promotion offer for its new iPhone XS and iPhone XR devices in the U.S.in November.

Wall Street analysts scrambled to cut their price targets on Apple, with at least 27 lowering their estimates.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China", Cook expressed in a written statement.

More news: Apple warns of big hit to iPhone sales in China

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

The rare revenue warning - the company's first in almost 12 years - sent shockwaves through global financial markets with chipmakers that supply to Apple being the hardest hit.

Trump said Apple has gone up "hundreds of percent" since he's been president, but added that he wants the company to make its iPhone and other products in the US.

Apple, which has been growing in China even though it lacks a dominant position, is pressured by tariffs and other trade issues, further inflamed by the arrest of China-based Huawei's chief financial officer in Canada at the behest of the United States.

The promotion in China is available until January 31, around the same time the iPhone maker is expected to release its fiscal first-quarter earnings.

"This is not a catastrophe nor is it a sign that Apple is losing its grip on the smartphone market but merely a misjudgment by Apple with regard to how much money people will pay for an iPhone".

Both Apple and Bernstein Liebhard have been contacted for comment.

The firm had warned investors in November that a strengthening dollar and economic weakness in some overseas markets would be likely to hurt sales in the last three months of the year. These analysts said in a research note that services represent a huge business opportunity for Apple.

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