Apple shares drop after news of waning iPhone sales

It's all about Apple as it blames China

It's all about Apple as it blames China

The company said it now sees fiscal first-quarter revenue of $84 billion, below the $89 billion to $93 billion that it had previously expected.

President Donald Trump's trade war with China will force many USA companies to join Apple announcing lower than expected earnings, the chairman of the White House Council of Economic Advisers said.

"Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline", Cook said in the letter.

Cook also admits that iPhone upgrades weren't as strong as expected even in "some developed markets". As Q1 progressed, traffic to Apple retail stores and its channel partners in China declined.

Apple will have to figure out ways to courageous macroeconomic woes like this, and that might mean learning to make more money from non-iPhone products in its catalog.

All three major USA indices tumbled as Apple's dramatic nine per cent fall at the open sparked another painful day for investors. On Wednesday, China's central bank magazine said the country's economic growth could fall below 6.5 per cent in the fourth quarter as companies face increased difficulties there. While usually Apple would be celebrating another successful holiday season, things didn't quite go to plan this time around.

This represents the biggest stock market dive since 5 December when U.S. stocks suffered a dramatic decline; the Dow Jones fell 800 points back then due to renewed concerns over Washington's trade dispute with China and indications of a possible looming economic recession.

Apple shares were down 8% early Thursday.

Apple's share price dropped by 10 per cent the back of the update.

Tim Cook, Apple's chief executive, said the company would report revenues of around $84bn (£67bn) for the three months to the end of December, usually a blockbuster trading period that comes after new iPhones are released.

Beyond demand in China, Cook also blamed fewer carrier subsidies, USA dollar strength-related price increases in foreign markets and customers taking advantage of cheaper battery replacements as other factors.

Apparently, Apple CEO Tim Cook laid the blame for the company's "poor" performance on China, where iPhone sales are in a slowdown due to deteriorating US-China relations. As of July, the US was running a $222.6 billion trade deficit with China.

But despite these challenges, Cook said Apple believes its business in China has a bright future.

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