Apple Stock Drops After Company Announces No Growth in iPhone Sales

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Apple Inc has warned that sales in the holiday quarter, likely will not meet the expectations of wall street, CEO Tim cook explained the weakness in emerging markets and foreign exchange costs.

Apple holds around 12 percent of the global smartphone market, with most of the rest sold by makers of Android-powered software.

"We have been in discussions with them and the discussions are going quite well", Cook said during the fourth-quarter 2018 earnings call on Thursday. Those include increased government regulation, the escalating US trade war with China and the specter of rising interest rates crimping economic growth.

But one problem Apple investors will face is not knowing what the margin mix is within the services business.

"I was shocked, but it makes sense", said Gene Munster, a veteran Apple analyst at Loup Ventures.

Shares hit $209.20, down from $232 at the start of October, even after Cook reassured investors that Apple's popularity in China remained strong, in the face of a strong USA and China trade war. "To give you an example, the unit sales of iPhone at the top end of the line have been very strong during the September quarter".

The unexpected change raised suspicions that Apple might be trying to mask a downturn in the phone's popularity.

Apple's cautious forecast could accelerate investor fears that have in turn erased stock market gains for much of the year.

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During its earnings call, CFO Luca Maestri announced Apple would no longer provide unit sales for iPhone, iPad and Mac sales, starting with its December quarter.

Chief executive Tim Cook said that Apple is "seeing some macroeconomic weakness in some of the emerging markets" such as Turkey, India, Brazil and Russian Federation. First, they will show just how lucrative Apple's hardware business really is. That's a little bit lower than some of the most bullish analysts were hoping for.

'It doesn't matter a lot how many units are in there in terms of the overall value of what's in the cart'.

Both analysts and investors used it to calculate the average selling price of Apple's devices and gauge the company's financial health.

But Cook stressed that Apple was happy with its performance in China, where revenue grew 16 percent to $11.4 billion, the fifth quarter in a row the company has had double-digit growth in the region. Revenue was up 20 percent YoY to $62.9 billion, with earnings per share of $2.91, up 41 percent.

The technology giant's revenue for the last three months was 62.9 billion dollars (£48.4 billion) - up 20% on the same period past year - with a profit of 14.1 billion dollars (£10.8 billion). Sales figures are a stable metric by which to measure the health of a company, and by concealing this information Apple is suggesting it's not doing as well as many thought.

Apple revealed had it sold 46.9 million iPhones during the previous quarter.

Apple has reported an increase in revenue and profit in its latest financial results despite iPhone sales stalling. The iPhone's ASP is an important indicator of the kind of iPhones people bought in the quarter.

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