Economy

Apple reduces revenue forecast, blames China slowdown

Apple reduces revenue forecast, blames China slowdown

Additional major American brands - including Ford Motor Company and Tiffany - have also recently suffered sharp sales drops in China. I hope Apple has better ideas than this.

Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Cook's comments on the impact of the US trade tensions with China "might be a dig at (US President Donald) Trump, but mostly he may be using the trade turmoil as an excuse for some missteps they've made over the past year". The Cupertino, Calif. -based company has seen its stock drop more than 30 percent as numerous parts and chip suppliers for the iPhone have slashed sales forecasts. These included the strength of the U.S. dollar, in addition to "challenges" in emerging markets such as those in Asia.

Apple shares skidded 7.7 percent in after-hours trade, dragging the company's market value below $700 billion.

Existing initiatives haven't altered the smartphone market reality. "Because they build their products mostly in China".

In 2018, the Dow suffered its worst year since 2008. I have talked to a few people, both at Apple service centers and at third-party authorized fix centers, who report that there had been a significant uptick in iPhones coming in for battery replacement over the final few months of the program, so maybe this did indeed have a bigger than anticipated effect on holiday sales.

"Most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac and iPad", Cook wrote.

Apple cut its revenue outlook for the latest quarter on Wednesday, citing steeper-than-expected "economic deceleration" in China and emerging markets. LVMH, the luxury giant that owns Louis Vuitton and has often been used as a barometer for consumer spending in China, said the Chinese were spending "a little bit less".

That explanation deserves more attention.

Forte says that in spite of the soft iPhone performance, the good news is the rest of the product portfolio is up 19 percent, and that could bode well for the future. Trump said that Apple is now building a new campus in USA because of "what we did with taxes and the incentives we created in the United States".

The company (AAPL) announced on Wednesday that investors should expect lower revenues than those projected for the last quarter because sales in China were below those anticipated.

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"China's economy began to slow in the second half of 2018".

"Our country is doing by far than than any other country in the world". And people are holding on to their old devices for longer before splurging on new ones, which weighs on new smartphone sales.

Meanwhile, global competitors such as Samsung and Xiaomi have carved up India between them, accounting for one in every two smartphones sold.

Apple said at the time that it wanted to reduce investor focus on its iPhone division and instead highlight other promising areas of its business, including its services division that sells subscriptions for music streaming, collects app-related commissions and repairs malfunctioning devices.

Apple attributes disappointing sales to the slowdown of China's economy. Sound familiar? Some of those excuses were valid then.

Apple and the White House didn't immediately respond to requests for comment. But that didn't mean everything was trouble free, as Cook repeatedly suggested. "Apple was at a number that was incredible, and they're going to be fine".

Cook also cited the trade war between the U.S. and China as another factor.

One thing Cook didn't mention in his letter is Apple's declining market share in China and the rise of domestic rivals like Huawei and Oppo. That isn't entirely true. Trade tensions between Beijing and Washington have also intensified with tit-for-tat tariffs.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. She previously was a reporter for the Wall Street Journal.