Published: Sat, January 05, 2019
Business | By Eloise Houston

Here's What Analysts Are Saying About Apple's Slowing iPhone Sales

Here's What Analysts Are Saying About Apple's Slowing iPhone Sales

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China", Apple CEO Tim Cook said in a letter to investors.

In some developed markets, iPhone upgrades also were not as strong as we thought they would be.

The announcement caused Apple to temporarily halt trading in its shares, and when the stock resumed trading after-hours, investors promptly dropped its price to the tune of 7.5 per cent. ®. Apple's stock had fallen 32 percent from an October peak to its close of $157.92 Wednesday amid growing concerns about the iPhone. Cook's update on Wednesday revealed that guidance has now plummeted to $84 billion in revenue for the quarter.

The tech giant is now anticipating revenue of $84 billion United States dollars for the final three months of 2018, down five percent from the same period in 2017 and $9 billion lower than Apple's original highest forecast for the quarter. Secondly, Tim Cook thinks the weakening USA dollar is to blame for Apple's lowered profits, as well as the company's flagship device, the iPhone, experiences its worst sales run in recent memory due to competition from overseas.

"I think the main villain is the very high prices that Apple is charging for its new iPhones", said Richard Windsor, a technology analyst who writes the Radio Free Mobile blog.

"If you look at our results, our shortfall is over 100% from iPhone, and it is primarily in greater China", Cook told CNBC.

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.

Even the "budget" iPhone in the new lineup, the iPhone XR, has a starting price of $749-meaning that the iPhone's entry-level pricing is now equal to what its high-end pricing had been just two years ago.

"Don't forget this: Apple makes their product in China", Trump said. In November, the company said it would stop reporting unit sales of iPhones, iPads and Macs beginning in fiscal 2019.

In late December, the promotional program for the new models went live in China, adding one major perk: users in China cannot only trade in their old iPhones, but also Android phones made by Apple's major competitors in China, including Huawei, OPPO and Xiaomi. There are likely many others, too, that will be forced to announce lower-than-expected earnings, according to the chairman of the White House Council of Economic Advisers.

"I think there are a heck of a lot of USA companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year". These analysts said in a research note that services represent a huge business opportunity for Apple.

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