Apple Cuts Steerage for Newest Quarter; Shares Tumble

Tim Cook blamed an economic downturn in China

Apple had plenty of time to find another cash cow, and it didn't. -China trade tensions, but said the company won't "sit around waiting for the macro to change" in an interview with CNBC.

But that's missing Apple's biggest problems, according to a new report from Nicolas Baratte and Cherry Ma, analysts at Hong Kong-based CLSA, who point directly to the iPhone's climbing average selling price (ASP) and increased competition from the likes of Huawei and others. On Thursday it was also announced that Apple is likely to remove some iPhones from stores in Germany, as Qualcomm moves to enforce an earlier court order banning the sale of some iPhone models in the country.

Dow futures pointed to a much lower open Thursday morning, falling 335 points.

The yield on the 10-year Treasury fell to 2.64 per cent.

"This is not only great for the environment, it is great for the customer, as their existing phone acts as a subsidy for their new phone", Cook said.

Apple acknowledged that demand for iPhones is waning, confirming investor fears that the company's most profitable product has lost some of its lustre.

In a letter to investors, Apple CEO Tim Cook said the company had not anticipated the magnitude of the slowdown in the region.

In a letter to investors Wednesday, Apple CEO Tim Cook said the company's fiscal Q1 2019 revenue would be lower than expected, a rare occurrence from one of the most valuable and profitable companies in the world.

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Data released earlier on Friday showed USA employers added the most workers in 10 months as wage gains accelerated. He added that, if needed, "we are always prepared to shift the stance of policy and to shift it significantly".

Still, some local players managed to grow against the trend and they may be eating into Apple's market share.

Apple has become the target of nationalist sentiment over the arrest of Huawei's chief financial officer in Canada at the behest of the USA for alleged Iran sanctions violations.

Under the new guidance, Apple says revenue will be around $84bn, well short of the $89-93bn range Apple had estimated and a sizeable drop from the $88.3bn revenue haul Apple reported in Q1 FY 2018.

"In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad", Cook said in the letter. In August it became the first publicly traded company to be valued at $1tn.

Trump also seemed to suggest that the reason for Apple's recent misstep was the location of their manufacturing plants. For the three months to 29.

Shares of the iPhone maker cratered almost 8 percent in extended trading Wednesday - knocking some $50 billion off the market cap after the company took the unusual step of cutting its revenue guidance. 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.

In addition to the reduction in Apple device sales, there are global issues like Brexit and the potential US-China trade war also unsettling shareholders.

"The company is growing its services and "other" categories, just not enough to drive overall revenue growth", Moorhead said. "I haven't seen a December number yet, but I'd bet it would not be good either". Analysts had been expecting revenues of around $91bn, according to market analyst FactSet. "He's going to build a campus and lots of other places".

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