Apple cites China as it cuts forecast

Apple cites China as it cuts forecast

Apple shares fell 7pc in extended trading after the announcement.

Apple's stock plunged 7 percent to $146.40 in extended trading.

Cook said other factors will also pull down Apple's revenue, including the timing of its iPhone launches past year and a strong dollar that means lower revenues when converted to United States currency. Sales of Apple Watch Series 4 and iPad Pro were constrained much or all of the quarter.

Apple stock had already declined almost 30% since the end of October through Wednesday, as concerns had mounted about weak demand for the iPhone models released last fall, amid a number of smartphone supplier warnings.

And it may have further ruffled feathers in Shenzhen after a number of popular American blogs, including 9to5mac, picked up on and ran with the since-deleted tweet, marked "via Twitter for iPhone".

"It's been a ideal storm of negativity for Apple", Wedbush analysts wrote in a recent report.

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Though Cook did not acknowledge the eye-watering prices of Apple's new iPhone XS and XS Max - which start at $999 and top out at $1,449 - as a contributing factor to Apple's woes, he did point a finger at "US dollar strength-related price increases".

"We would anticipate the company increasing share buybacks on the weakness to return capital to shareholders at discount prices", said Trip Miller, managing partner at Apple shareholder Gullane Capital Partners. The news comes as USA earnings season looms around the corner.

The warning brought the effects of the ongoing US-China trade war into sharp focus as many firms reliant of Chinese sales saw their shares hit.

Cook said the slowing in China's economy was made worse by "rising trade tensions with the United States". As Cook noted, government-reported GDP growth during the September quarter was the second lowest in the last 25 years. Cook acknowledges that China, in particular, is becoming a problem. "There's no strong case to buy the latest iPhones at all". A survey past year found that more customers were buying the cheaper iPhone 8 rather than the pricier iPhone X, perhaps signaling that people weren't willing to pay up for the latest bells and whistles.

While these arguably embarrassing things are generally forgotten within a few days of their discovery after companies rush to erase all traces of their errors and we move on to more consequential stories in the global tech industry, Huawei's recent gaffe continues to make headlines. "Based on our best estimates of how these would play out, we predicted that we would report slight revenue growth year-over-year for the quarter", Cook wrote in a long-winded letter to investors.

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