Apple sees a significant slump in iPhone sales

China Takes Wind Out Of Apple iPhone Sales

Apple's stock has fallen 32 per cent from an October peak to its close of US$157.92 on Wednesday amid growing concerns about the iPhone.

Mr Cook traced most of the revenue drop to China, where the economy has been slowing and Apple has faced tougher competition from home-team smartphone makers such as Huawei and Xiaomi.

Wasting no time, Cook throws out revenue and expense numbers followed by the reverberating message that has been echoed across almost every publication that covers Apple, "our revenue will be lower than our original guidance for the quarter".

Apple now forecasts $84 billion Dollars (about $114 billion CAD) in revenue for the first quarter of 2018, a number that already sits below estimates of $91.5 billion ($124 billion CAD) based on BES data from Refinitiv, according to Reuters. "While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, United States dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements". On Wednesday Baidu chief executive Robin Li Yanhong warned that "winter is coming" as China's economy shifts to a lower gear, while Foxconn, which employs 1 million workers in China and manufactures Apple's iPhones, earlier admitted the trade war was its biggest challenge this year. The company also sees the traffic to retail stores and partner sellers in China declining in the quarter.

Analysts say Apple must now try to find a way to win back Wall Street's confidence and reverse a steep decline that has erased $350bn in shareholder wealth in just three months. Once presented with the evidence, Apple owned up to the throttling and said that it did so to preserve user experience and to prevent unexpected shutdowns.

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Slowing sales in China isn't Apple's only problem - results have been less than stellar in other markets as well. "Our other products category was even stronger than the overall company number".

As of 5:13 pm ET, Apple shares were down 7.23 percent to $146.50 in after-market trading.

Apple previously told investors to expect revenue between $US89 billion and $US93 billion.

The timing of Apple's announcement blaming its shortcomings partly on US President Donald Trump's trade war with China may increase pressure on American officials to ease the tensions quickly. In his letter on Wednesday, Mr. Cook pointed out that the company's quarterly non-iPhone revenue grew 19 per cent year-over-year. In November, Apple unexpectedly announced that it would no longer disclose how many iPhones it ships each quarter, ending a long-running practice. Apple remains efficient and earnings will be at all-time record levels. After Apple took such drastic measures as to put new iPhone models on sale leading up to the holidays, it was clear that the company was staring down the dark throat of decline.

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