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Apple reduces revenue forecast, blames China slowdown

05 January, 2019, 05:21 | Author: Kristi Dunn
  • Nobody in China wants Apple's eye-wateringly priced iPhones, sighs CEO Tim Cook

"The firm alleges that Cook's letter blaming business in China for the revenue shortfall is contrary to what he told investors during the company's fourth quarter conference call on November 1, where Cook is quoted as saying, "[Our] business in China was very strong last quarter.

Apple gave up 9.2 percent in early trading Thursday.

Some Chinese netizens and companies have also turned against Apple.

Kevin Hassett, chairman of the White House council of economic advisers, said that United States companies selling in China would see their sales recover if the trade dispute is resolved.

"China is the biggest beneficiary of Apple, more than us".

"It's definitely worrying", said China specialist David Dollar, senior fellow at the Brookings Institution.

China is looking to push ahead with its rollout of a faster 5G network, with a pre-commercial phase this year and a commercial network in 2020. "People are anxious about losing jobs", she said.

The Chinese apparently have been avoiding Apple stores in droves.

Apple's share of China's smartphone market has dwindled over the past three years and is expected to fall further as demand for expensive iPhones continues to erode. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years. Investors fear a slowdown of the world's second largest economy, which has been under pressure from a trade dispute between Washington and Beijing.

Trump's comments marked his latest effort to press United States firms to bring back manufacturing amid a simmering trade war between Washington and Beijing. Cook said the iPhone "accounts for all of our revenue shortfall". He added that overall, "consumption growth" is slowing down across China.

The warning rattled already-volatile USA markets, further feeding worries about global economic growth that have dragged on stocks in recent weeks and turned 2018 into the worst year since the financial crisis for Wall Street.

Aaron Rodgers Evaluated for Concussion, Exits Packers vs. Lions
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Vehicle sales have been shrinking for the first time since 1990, when most of the country was peddling bicycles. Soft real estate sales have forced developers to cut prices.

The iPhone maker lost around 18 percent in a year and is down almost 36 percent since October highs. A surprisingly weak report on US manufacturing made matters worse. Experts say many Chinese consumers are likely to reject Apple's iPhone price increases and instead buy less costly models from competitors. Some are priced as low as 500 yuan ($70).

'I won't really consider switching my phone until 5G has been operating stably on the market for some time without any bugs - or unless they stop offering 4G'. "Maintain prices, and customers could increasingly look to less expensive alternatives".

"If I have more money to spare, maybe I won't hesitate to buy the latest iPhone", Zhu said as he brandished his bezel-less OnePlus 6, which, except for the logo, looked nearly exactly like an iPhone.

Sacconaghi acknowledged that "a meaningful portion of the China weakness is macro driven", which means there are circumstances beyond Apple's control. While the analysts acknowledged that slower iPhone sales "ultimately presents services headwinds", meaning there's a chance the services business could potentially take a hit along with the iPhone business, there's still a "has huge untapped services rev pool".

What happened: In a rare move, Apple has cut its quarterly sales forecast, blaming its poor performance on trade tensions between China and the U.S., as well as economic deceleration in Greater China. "Apple was at a number that was incredible, and they're going to be fine".

Samsung is expected to unveil a 5G phone in the first half of the year.

Emily Li is a 37-year-old advertising designer in Beijing.

As a university student, Yuan had an iPhone paid for by his parents.

"I have no plans to buy an apartment, a vehicle or any other major items", Yuan said.



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